SCOTT DETROW, HOST:
In Turkey, gold is gifted throughout life's major milestones. Stashing it safely at home is also a time-honored practice. Turks have long safeguarded their fortunes as a hedge against the country's volatile economy, but officials say all that gold hoarding is hurting Turkey's financial future. NPR's Hadeel Al-Shalchi reports from Istanbul.
HADEEL AL-SHALCHI, BYLINE: It's early at the Mahmutpasa Yokusu market in the heart of Istanbul.
(CROSSTALK)
AL-SHALCHI: Store owners call out their wares as shoppers dart in and out, snatching up everything from kitchen gadgets to blankets to wedding dresses. Bride-to-be Nefise Asker says she's having to find six outfits that she'll change into over her dayslong wedding this September.
NEFISE ASKER: (Non-English language spoken).
AL-SHALCHI: "I'm trying to find the one I'll wear during my wedding photo shoot," she says. Along with the dresses, the 23-year-old says she can't wait to get the staple of Turkish wedding gifts - gold.
ASKER: (Non-English language spoken).
AL-SHALCHI: "We'll share the gold as a couple to support our new life together," she says. Historically, the gold was sometimes financial insurance for wives who didn't work. Selva Demiralp is an economist and used to work for the Turkish federal reserve.
SELVA DEMIRALP: If everything goes south, you still have your gold that is gifted to you during your wedding, and that will be your lifetime savings.
(CROSSTALK)
AL-SHALCHI: Over his 50 years as a gold seller at Istanbul's historic Grand Bazaar, Mehmet Yildirimturk has seen a lot of brides.
MEHMET YILDIRIMTURK: (Non-English language spoken).
(SOUNDBITE OF COINS CLINKING)
AL-SHALCHI: He's sitting in his cramped store inside the bazaar, counting gold coins on his glass countertop. A fan blows hot air around as he explains why so many people hold on tight to their gold.
YILDIRIMTURK: (Non-English language spoken).
AL-SHALCHI: "It's a vital tool for Turks. It helps protect them, especially from inflation," he says. Inflation is a chronic problem here. Turkey has one of the highest rates in the world, now hovering around 31% annually. Daily living costs have become more expensive. In contrast, gold is less volatile, and prices are at an all-time high. Yildirimturk says stashing their gold is literally a financial cushion for Turks.
YILDIRIMTURK: (Non-English language spoken).
AL-SHALCHI: "We call it (non-English language spoken), which translates to gold under the pillow." The finance minister says there's almost 5,000 tons of gold stored in Turkish households today. That amounts to about $600 billion, according to the governor of the central bank of Turkey. And that's a lot of money kept idle, says economist Demiralp.
DEMIRALP: It's not being lent out to businesses. And also, a good chunk of the gold has to be imported every year, which adds to the current account deficit. So it's capital that's parked rather than working.
AL-SHALCHI: And if all that money went back into the banks, she says regulators could have a chance to do their job and restore consumer confidence.
DEMIRALP: There is going to be more trust in the economy, there's going to be more investment, and eventually, that would lead to more jobs and less unemployment.
AL-SHALCHI: Turkish President Recep Tayyip Erdogan has been trying for years to get citizens to deposit their physical gold into the banks, like during this 2023 speech to his Cabinet.
(SOUNDBITE OF ARCHIVED RECORDING)
PRESIDENT RECEP TAYYIP ERDOGAN: (Non-English language spoken).
AL-SHALCHI: "This brings no benefit to either my people themselves or to my state," he says. Erdogan's increasingly strong-handed economic policies haven't helped either. He's fired six central bank heads over the last seven years.
Back in the Grand Bazaar, gold seller Yildirimturk says mistrust of Turkey's banks runs very deep these days.
YILDIRIMTURK: (Non-English language spoken).
AL-SHALCHI: "The gold just isn't coming out from under their pillows," he says. "The government just hasn't been able to provide that confidence yet," he adds. Bride-to-be Nefise Asker shopping for her dresses says she won't be putting any of her gifted gold in the bank.
ASKER: (Non-English language spoken).
AL-SHALCHI: She says it's not going under a pillow but will definitely be hidden in a box at home. Hadeel Al-Shalchi, NPR News, Istanbul.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
