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NewsKPBS Public MediaSeptember 16, 2026San Diego County

Turkish officials and economists warn that household gold hoarding hurts the national economy

Photo: KPBS Public Media

Turkish households store approximately 5,000 tons of gold valued at $600 billion outside the formal banking system to protect against high inflation and currency devaluation. Government officials and economists warn that this practice deprives the banking sector of capital and worsens the current account deficit, while citizens continue the tradition due to deep-seated mistrust in financial institutions.

EconomyInflationBankingCurrencyGold
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Why It Matters

The practice ties up roughly $600 billion in idle household assets, which economists state prevents the capital from being lent to businesses and complicates national monetary policy.

Key Facts

  • Turkish households currently store approximately 5,000 tons of physical gold.
  • The total value of hidden household gold is estimated at approximately $600 billion.
  • Annual inflation in Turkey hovers around 31%.
  • Nearly four in 10 respondents in a Koç University survey rated their trust in commercial banks close to zero.
  • Over half of survey respondents rated their trust in the statistical agency in the near-zero range.
  • President Recep Tayyip Erdoğan has launched government incentives and banking programs aimed at converting physical gold into bank deposits, which have largely failed.
  • Six bank heads were fired over a seven-year period.
  • A significant portion of hoarded gold has to be imported annually, adding to the current account deficit.

Who's Mentioned

locationIstanbul“City where Mahmutpaşa Yokuşu market and Grand Bazaar are located.”PersonRecep Tayyip Erdoğan“Turkish President who urged citizens to deposit hoarded gold.”OrganizationKoç University“Institution where Selva Demiralp conducts research on economic trust.”PersonSelva Demiralp“Economist at Koç University and former economist for the Turkish Federal Reserve”PersonMehmet Yıldırımtürk“Currency exchanger and gold seller in Istanbul's Grand Bazaar with over 50 years”OrganizationTurkish Central Bank“National bank whose head estimated the value of hidden household gold.”PersonNefise Asker“23-year-old bride-to-be planning to receive and store wedding gold at home.”other23“Age of bride-to-be Nefise Asker.”OrganizationTurkish finance ministry“Government body that reported household gold storage estimates.”locationTurkey“Country experiencing high inflation and widespread gold hoarding.”other31%“Approximate annual inflation rate in Turkey.”