Turkey's Central Bank officially repeals regulation that brought under-the-mattress gold into the financial system - finance.biggo.com

Turkey’s central bank has formally scrapped a long-standing measure that allowed commercial banks to count physical gold toward their mandatory reserves. Introduced in the early 2010s, the policy was designed to encourage households to convert idle, under-the-mattress gold into bank deposits, thereby deepening the financial system and easing pressure on foreign exchange reserves. With the repeal, banks can no longer use bullion as a reserve asset, ending a channel that had tied household gold hoards to the banking sector.

The move has direct implications for Turkey’s financial and monetary dynamics. Banks may now need to restructure their reserve composition, potentially shifting away from gold toward lira or foreign currency. This could affect liquidity conditions, lending appetites, and the central bank’s own balance-sheet toolbox. For the broader gold market, the repeal may alter domestic supply and demand patterns, as well as the visibility of household gold in official statistics. Investors and analysts will likely watch for any associated changes in Turkish gold imports, bank reserve ratios, or commentary from policymakers regarding reserve management strategy. The evolution of lira stability and inflation expectations will also remain key indicators of how the market absorbs this regulatory reversal.