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Turkey’s central bank has formally rescinded a regulation that encouraged households to channel gold stored outside the banking system into official financial channels. The measure, originally designed to mobilize significant household gold reserves, allowed commercial banks to hold physical gold and use it as part of their reserve requirements. By repealing it, the central bank is signaling a shift in how it manages the relationship between bullion and monetary policy.

From a market perspective, the repeal removes a systemic incentive for banks to attract gold deposits. This could slow the flow of physical gold into the banking sector, potentially reducing the availability of gold-linked credit and altering banks’ balance sheet composition. It also ends a tool that indirectly supported the Turkish lira by converting a traditional store of value into productive financial capital.

Investors and market participants should watch how this affects Turkey’s official reserve figures and whether new mechanisms emerge to replace the gold monetization scheme. The decision does not change the legal status of gold ownership, but it does mark a notable step back from a policy that once played a role in financial deepening.