by Adrian Ash
AMID the brouhaha over Germany’s gold reserves at the Bundesbank, there’s another central bank using gold actively to bolster its currency and financial stability.
The strategy looks the same – sitting on big stockpiles of the stuff. But the aim differs, because gold is much closer to the everyday financial system. The tactics differ too. Because the central bank hasn’t bought and paid for this gold. Private citizens have.
“Gold-based deposit accounts [in Turkey] surged 15% this year through the end of July,” explained BusinessWeek back in October, “three times the increase in standard savings accounts.”
“Although much criticised for its use of ‘unconventional measures’,” the Financial Times added in December, “few would argue that the decision last year by Turkey’s central bank to allow the country’s banks to buy gold was anything less than a roaring success.”