Central Bank announces details of 'foreign-exchange protected' gold deposit accounts

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The Central Bank has released a communiqué laying out the conditions of the "foreign-exchange protected gold deposits" system.

Accordingly, real and legal persons will deliver their gold savings to authorized jewelry stores or banks for the determination of the amount of gold in grams. These golds will be delivered to the authorized refineries for processing.

In exchange, people will have Turkish lira deposit accounts with a maturity of three or six months or one year.

The gold converted into lira will be sold by the banks to the Central Bank at the conversion price.

The interest rate to be applied to the protected lira accounts will be no lower than the Central Bank's policy rate. The Central Bank will also have the authority to determine the maximum interest rate to be applied to the protected deposit accounts.

In the face of high volatility in foreign exchange rates, the government in late 2021 introduced the foreign exchange rate protected lira deposit system, in which the state compensates for the difference between the interest rates and the change in foreign exchange rates.

In February, the system was expanded to include gold deposit accounts. (TP/VK)