ISTANBUL — In Turkey, gold is far more than a decorative accessory. It is gifted throughout life's major milestones and stashed safely at home—a time-honored practice designed to protect savings against frequent currency devaluations and a volatile national economy. However, Turkish officials and economists warn that this culture of gold hoarding is actively undermining the country's financial future.
At the bustling Mahmutpaşa Yokuşu market in the heart of Istanbul, store owners call out their wares while shoppers dart between stalls, snapping up everything from kitchen gadgets and blankets to elaborate wedding dresses. Among them is Nefise Asker, a 23-year-old bride-to-be searching for the perfect outfit for her upcoming wedding photoshoot—one of six outfits she plans to wear over a multi-day celebration this September. Like many Turkish brides, Asker is eager to receive the traditional staple of Turkish wedding gifts: gold.
"We'll share the gold as a couple to support our new life together," Asker says. Historically, gifted gold used to serve as financial insurance for wives who did not work outside the home. "If everything goes south, you still have your gold that is gifted to you during your wedding, and that will be your lifetime savings," explains Selva Demiralp, an economist at Istanbul's Koç University and a former economist for the Turkish Federal Reserve.
That mindset extends far beyond newlyweds. In Turkey, the practice of holding wealth as physical gold or foreign currency outside the formal banking system—known locally as yastık altı, or "under the pillow"—is sometimes dismissed as an outdated habit. However, Demiralp emphasizes that this behavior is a logical defense against chronic instability.
"Once you look at why people do this, it stops looking irrational actually, and it's a very rational response to a long history of high and unpredictable inflation, a few banking crises people still remember, and a general sense that the lira just doesn't hold its value the way gold does," Demiralp explains. In Istanbul's historic Grand Bazaar, Mehmet Yıldırımtürk sits in his cramped, stuffy shop counting gold coins on a glass countertop as a small fan circulates the warm air. Yıldırımtürk, who has worked as a currency exchanger and gold seller for over 50 years, views gold as an essential line of defense.
"Gold is a vital tool for Turks," Yıldırımtürk says. "It helps protect them, especially from inflation." Inflation remains a chronic crisis in Turkey, hovering around 31% annually—one of the highest rates in the world. As the Turkish lira continues to weaken, daily living costs have skyrocketed.
Extract — continue reading at the source.
