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Turkish gold reserves fall by 31 tonnes

Istanbul, February 26, 2014

Gold holdings at Turkey's central bank fell by a hefty 31.171 tonnes in January, data from the International Monetary Fund (IMF) showed.

Uniquely among central banks, Turkey counts gold held on deposit with it by commercial banks as part of its bullion holdings. That means outflows from those holdings do not necessarily reflect central bank selling.

Turkey's bullion holdings were down six per cent month-on-month at 488.578 tonnes in January, preliminary IMF data showed yesterday. The drop followed a series of increases in the country's holdings last year.

The Turkish lira sank in January as a crisis in emerging markets sparked heavy selling of the currency, hitting a record low of 2.39 versus the dollar on January 27. That prompted the central bank to hike interest rates dramatically.

Weakness in the lira lifted the price of gold denominated in the Turkish currency. The country's gold imports plunged last month to just 6 tonnes, from 31.6 tonnes in December.

Turkey is the world's 12th-largest holder of gold as part of the central bank's reserves, according to the World Gold Council (WGC), which represents producers.

The IMF said the euro area increased its gold holdings by 7.776 tonnes to 10,787.434 tonnes in January. Gold reserves by Germany, the world's second-largest holder, were unchanged at 3,387.247 tonnes while top-ranked US held steady at 8,133.715 tonnes.

Gold holdings by central banks are closely watched since the group became net buyers in 2010 after two decades as net sellers. The 2008 global economic crisis triggered a wave of official-sector interest in gold.-Reuters




Tags: Gold | Turkey |

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