Getting gold out from under Turkish mattresses
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Turks still favor a timeless investment strategy: Buy gold and hide it somewhere safe, usually under a pillow or under the mattress.
"I don't understand modern investments like stocks and forex. Gold is my family's traditional investment, as my mother always encouraged me to buy gold for savings," says 36-year-old Selda Kırpınar in Ankara, who stores away her gold at home.
Turks are, in fact, the world's third-largest purchasers of the precious metal, after the Chinese and Indians. In 2013, the country's gold imports skyrocketed 150 percent, to a record level of 302.3 tons totaling $16 billion in value, according to central bank statistics.
Firdevs Karagöz, 28, a housewife from the eastern province of Erzurum, said that she has bought more than 200 gold coins since 2005 to save money.
Buying physical gold, that is purchasing the actual metal as opposed to stocking shares in gold electronically, is seen as a traditional investment for many Turks, who are seeking security against the declining value of the Turkish Lira.
It is believed that over 5,000 tons of gold, currently worth close to $200 billion, are held under the mattresses and pillows of Turkish residents as a form of personal savings, and therefore kept out of the banking system. In addition to gold, jewelry is seen as a traditional gift for newborn children and is also given at wedding ceremonies in the country.
Turkey's Central Bank held gold reserves totaling $20.13 billion as of Dec. 19 of this year.
However, the Turkish economy needs this money for investment, as growth slows and high interest rates make borrowing expensive.
Can the government and the banks convince gold buyers to take their gold out from under their mattresses and...
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