Turkey May Raise Banks' Gold Bullion Reserves Limit

TURKEY'S central bank said this week it is considering raising the proportion of Turkish Lira reserves that banks can hold as Gold Bullion.

Last year, the central bank announced that banks could hold up to 10% of total reserves in the form of Gold Bullion. This was later raised to 20%, although at the same time the requirement was amended to state that Gold Bullion could only make up a proportion of domestic currency reserves, and that banks could not count Gold Bullion towards their foreign exchange reserve holdings.

At its monthly policy meeting this week, the central bank said it may "gradually" raise the maximum proportion of Lira reserves than can be held as gold from the current 20% to 30%, according to newswire Reuters.

Turkey, which suffered a banking crisis at the start of the last decade, saw its Gold Bullion reserves rise by 29.7 tonnes in April, according to International Monetary Fund figures. In March, the Wall Street Journal reported that Turkey's government was planning to encourage people to deposit privately-held Gold Bullion with the banking system.

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