According to media reports, Turkey plans to lift the ban on the import of certain types of gold and introduce new levies and a quota system. On Tuesday, the Turkish government announced an additional 20% charge on certain gold imports. According to the new regulations, any gold imports from countries that don't have a free trade agreement and aren't part of the European Union will incur an additional fee on top of existing import and other duties.
After state media reported that the government was considering the introduction of quotas on gold imports, a new charge was implemented the very next day.
On Monday, it was announced that the Treasury decided to introduce a quota to reduce the deficit and increase foreign currency reserves. This occurred six months after the government banned the import of a certain amount of gold to curb the growing current account deficit.
According to government data published in July, Turkey's current account deficit reached $37.7 billion in the first five months of the year, the highest figure for the January–May period. In the first seven months of the year, raw gold imports increased by 180% compared to the same period the previous year. The quotas will apply to the import of raw gold carried out by precious metal brokers who are members of Borsa Istanbul.
The report states that monthly quotas will consider the volumes of raw precious metal imports made by brokers in previous years. Imports for subsequent export will be excluded from the quota to stimulate gold production and export.
These actions are related to the country's efforts to find a balance in the gold market to meet consumer demand while maintaining its gold reserves.
The central bank had to sell more than 100 tons of its gold reserves from March to May to meet domestic demand. Only after the central bank purchased 11 tons of gold in July did it begin to replenish its reserves.
According to a report by the World Gold Council, demand in Turkey for jewelry, bullion, and coins reached 118 tons in the first half of the year. This is the highest figure for the first half of the year since 2007.
Inflation, loose monetary policy, the historically weak lira, and presidential elections proved to be a potent combination for the local gold price to reach record highs.
