ANKARA, Turkey -- Turkey is taking steps to give its central bank the right of first refusal on domestically produced gold, two sources said, allowing it to boost reserves of the precious metal without depleting foreign currency holdings.
Like other central banks, the Central Bank of the Republic of Turkey holds a mix of assets, including foreign currencies and gold, as official reserves. The International Monetary Fund has recommended that Turkey bolster its foreign reserves to shield itself from external volatility.
Buying more domestically produced gold, which is priced in lira, will allow the bank to avoid depleting foreign reserves at a time when the domestic currency has been hammered by political concerns.
"The central bank is being given first option" to buy locally mined gold, said an official from the domestic gold sector. "This means the central bank will become a primary gold buyer in lira." ...
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