FX.co ★ Turkish citizens keep more than 5,000 tons of gold at home

As Turkey fights inflation at nearly 50%, the government wants to encourage citizens to convert their "under the mattress" gold worth billions of dollars into lira-denominated bank accounts.

The Ministry of Finance estimated that Turkish citizens kept more than 5,000 tons of gold in homes, which could be deposited into the banking system to strengthen the Turkish lira.

5,000 tons of gold is approximately $250-350 billion.

Treasury and Finance Minister Nureddin Nebati said at a press conference in London that a certain part of that amount would support the Central Bank's foreign currency needs.

Nebati added that 30,000 gold stores and five refineries would potentially help with logistics. More details about the government's plan to convert private gold holdings into lira bank accounts will be announced in a few days.

According to Turkey's latest inflation data, price pressures have soared to new 20-year highs with an annual rate of 48.7%.

The Turkish lira has not been holding up well in light of these inflation figures. Last year, the country's currency plunged by 44% against the US dollar.

Back in December, the Turkish government announced its new FX-protected Turkish lira deposit scheme, which encouraged the transfer of foreign-exchange (FX) deposits into exchange-rate-protected Turkish lira deposits.

However, according to Fitch, the reception has been very slow.