Turkish habit of stashing gold "under the pillow' hurts economy, government says

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Published: 2026-09-16T01:02:53.334Z • Permanent link

Turkish President Recep Tayyip Erdogan's government has officially condemned the long-standing habit of stashing gold "under the pillow" as a threat to the country's economic stability. This tradition, which has been passed down through generations of Turkish citizens, is a testament to the nation's mistrust of banks and the financial system. According to data from the Turkish Central Bank, over 1.5 million households have accumulated gold reserves, totaling approximately $10 billion in value. These reserves are often seen as a safeguard against economic uncertainty and a means of preserving wealth.

The Turkish government has been actively encouraging citizens to deposit their gold into banks, offering incentives such as tax breaks and interest rates that rival those offered by other financial institutions. However, many Turks remain hesitant to relinquish their gold, citing concerns over the safety and security of their deposits. In recent years, the Turkish lira has experienced significant volatility, leading to a decline in investor confidence and a subsequent decline in gold prices. Despite these efforts, the government's efforts to persuade citizens to surrender their gold reserves have been met with resistance, with some estimates suggesting that up to 30% of the nation's gold reserves remain in private hands.

Turkish economist and central banker, Naci Shanlik, has been a vocal advocate for the government's efforts to encourage citizens to deposit their gold into banks. "The gold reserve is a ticking time bomb for the Turkish economy," he warned in a recent interview. "It's a symptom of a deeper issue - a lack of trust in the financial system and a failure to diversify our economy." Shanlik's comments reflect the government's concerns that the nation's gold reserves are not only a financial risk but also a hindrance to economic growth.

The Turkish government's efforts to persuade citizens to surrender their gold reserves have significant implications for the global economy. The gold reserve is a major player in the world's largest currency market, the foreign exchange market. According to the Bank for International Settlements, the Turkish lira is one of the most volatile currencies in the world, and the government's efforts to stabilize the currency will have far-reaching consequences for other economies. The International Monetary Fund (IMF) has already expressed concerns over the Turkish economy's exposure to the gold reserve, warning that the nation's economic stability is at risk.

The gold reserve also has significant implications for research communities and markets. The Turkish government's efforts to persuade citizens to surrender their gold reserves will have a major impact on the nation's economy, with potential knock-on effects for the global economy. Research institutions such as the International Monetary Fund and the World Bank have already expressed concerns over the Turkish economy's exposure to the gold reserve, warning that the nation's economic stability is at risk. The gold reserve is also a major player in the world's largest market for gold, with major players such as the World Gold Council and the London Bullion Market Association (LBMA) closely monitoring the nation's gold reserves.

The Turkish government's efforts to persuade citizens to surrender their gold reserves are part of a larger pattern of economic reforms aimed at stabilizing the nation's economy. The Turkish government has been actively promoting economic reforms, including the introduction of a new tax code and the expansion of the nation's pension system. The government has also been actively promoting the development of the nation's financial sector, with a focus on increasing foreign investment and promoting the use of technology in banking. These efforts are part of a broader trend towards economic liberalization in Turkey, which has been underway for several years.