Gold deposit accounts surge in Turkey as people try to cope with runaway inflation

What do you do if the government is relentlessly devaluing your money?

Save in gold.

That’s exactly what people in Turkey are doing.

According to data from the Banking Regulation and Supervision Agency (BDDK), gold deposit accounts in Turkish banks surged by 99.1 percent year-over-year in the third quarter.

Turkish gold bank deposits now total 2.72 trillion liras. In Q3 2024, gold deposits totaled 1.36 trillion liras.

While gold accounted for around 8 percent of total Turkish bank deposits last year, its share grew to 11 percent at the close of Q3 ’25. Out of the 24.85 trillion liras in total bank deposits collected in the first nine months of the year, 2.72 trillion liras were in gold.

The majority of these gold deposit accounts (91.3 percent) are held by individuals, with corporate accounts representing just 8.7 percent of the total.

A gold deposit counts are typically denominated in grams of gold. Turkey ranks as one of the most developed countries in the world when it comes to gold deposit accounts. For instance, Kuveyt Türk offers gold deposit accounts with a minimum transaction limit of 0.01 grams. Account holders can buy or sell gold using Turkish lira, dollars, or euros.

Most gold deposit accounts at conventional banks in Turkey are unallocated book-entry claims on the bank and do not imply a promise to give you specific gold bars. Many accounts don’t allow physical delivery of metal at all.

In practice, gold deposit accounts are a convenient way to buy and sell gold without handling the metal. It also allows people to buy fractional amounts of gold. However, these deposit accounts have a higher level of counterparty risk than buying and holding gold yourself.

Gold: A safe haven for inflationary times

Turks are saving in real money - gold - to avoid the ravages of price inflation.

Turkish CPI began to spike in 2021, averaging 19 to 20 percent. By 2022, the Turkish economy was nearing hyperinflation status, with the average CPI spiking to 72 percent. It peaked that year between 85 and 86 percent.

Although price inflation eased somewhat in 2023, “cooling” to an average of around 54 percent, before reaccelerating again in 2024. By October of this year, Turkish CPI was still running around 33 percent.

Why this sustained surge of inflationary pressure?

As always, blame the government and a fiat money system that is backed by nothing.

Like their counterparts in the U.S., Turkish central bankers cut interest rates and engaged in money printing, despite rising inflation. President Recep Erdoğan even claimed high interest rates cause inflation, a notion counter to standard monetary theory.

This loose monetary policy drove real interest rates deeply negative. This incentivized people to dump lira for dollars, euros, or hard assets like gold.

This wasn’t merely a case of a policy misstep. It was intentional. The Turkish government used cheap credit and heavy spending to support economic growth in the run-up to national elections. The government implemented voter-friendly policies, including early retirement for over 2 million workers, repeated minimum wage hikes, and large public-sector pay rises. While this helped households struggling with rising prices, it also Fed inflationary pressures – not unlike U.S. stimulus during the pandemic.

From the government's standpoint, this isn't a bug in the fiat money system. It's a feature. Governments want money backed by nothing because it imposes no restraints on its spending. It's precisely why the U.S. began abandoning the gold standard during Franklin D. Roosevelt's administration, and President Nixon severed the last link between the dollar and gold. 

However, inflation is always the result of this monetary malfeasance. 

The government doesn't care, as long as inflation doesn't get to the point that you notice it. This is why central banks created the 2 percent target. There's nothing magical about 2 percent inflation. It's just a level that most people are OK with. From a government's perspective, Turkey's only mistake was pushing inflation beyond tolerable limits. 

People noticed, and now their spurning their paper money for gold. 

It's important to understand that the U.S. government is doing the exact same thing to the dollar. It's just destroying it at a slightly slower pace. That means if you want to preserve your wealth over time, you need to save in real money like a growing number of Turks. No matter what the government does to your money, they can't print gold. 

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