The currency crisis in Turkey dealt a crushing blow to the banks and are forced to get rid of gold, Paraanaliz reported.
The peak of the Turkish financial crisis came in August, when lira rate was sharply falling. The country's banking sector was under threat, as banks have a sufficiently large amount of external debt and the devaluation of the national currency complicates the servicing of these debts.
Until the end of 2019, Turkish banks must repay bonds for a total of $ 7.6 billion. Thus, since June 15, gold reserves have fallen by almost 20% to 15.5 million ounces, with the bulk of the reduction occurred at a time when the Central Bank of Turkey reduced the requirements for reserves.
Turkey is one of the few countries where banks are allowed to take gold into account for meeting reserve requirements. Moreover, Turkish banks borrow dollars and other currencies on international markets, and hedge dollar obligations using gold deposits instead of volatile lira, even when loans are denominated in lira.