Turkey’s gold-stashing habit is drawing renewed scrutiny from officials who say hundreds of billions of dollars in household wealth remain outside the formal financial system, limiting bank funding and complicating efforts to control inflation and external imbalances.
The practice, known locally as “yastık altı,” or “under the pillow,” reflects a long preference for keeping physical gold at home as protection against inflation, currency weakness and financial uncertainty.
Turkey’s Finance Minister Mehmet Şimşek has said about $640 billion in gold and foreign currency is held outside the financial system. Central Bank Gov. Fatih Karahan separately estimated in February that under-the-pillow gold could be worth about $600 billion.
Government estimates have also placed the physical stock at roughly 5,000 metric tons, though such holdings cannot be directly counted. Economists say the effect reaches beyond unused savings. Selva Demiralp, an economist at Koç University, told NPR that physical gold kept outside banks cannot support normal lending.
Turkey’s gold-stashing habit keeps vast household wealth outside banks
“It’s not being lent out to businesses,” Demiralp said. Gold demand can also increase imports, adding pressure to Turkey’s current account when domestic supplies are insufficient. That pressure was clear in 2022 and 2023. Turkey’s Finance Ministry said net gold imports accounted for $19.4 billion, or 39%, of the country’s $49.1 billion current-account deficit in 2022.
The government imposed a 12-metric-ton monthly quota on unprocessed gold imports in August 2023. Later central bank research found that some demand shifted toward imported jewelry.
Officials have spent years trying to draw household gold into banks through deposit accounts, government-backed bonds and lease certificates. President Recep Tayyip Erdoğan acknowledged in 2024 that efforts to bring under-the-pillow savings into the economy had not fully succeeded. The issue changed again as global gold prices climbed.
Rising gold prices add pressure to inflation policy
Karahan said in February that rising prices had generated more than $100 billion, and possibly as much as $200 billion, in additional household wealth. He said the wealth effect worked against efforts to restrain demand and slow inflation.
A 2026 central bank working paper also found stronger house-price gains and more cash-financed purchases in provinces where households were more inclined to save in gold.
Reluctance remains tied to custom and economic experience. Gold is commonly given at Turkish weddings and has long served as a private store of value. Mehmet Ali Yıldırımtürk, a veteran Grand Bazaar gold trader, told NPR, “The gold just isn’t coming out from under their pillows.”
For many households, keeping the metal close remains a form of financial security even as officials press for more of it to enter the formal economy.
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