Turkey's 'Gold Under the Mattress' Habit Costs Economy Billions

In Turkey, gold is not just a decorative accessory but a vital tool for protecting against inflation and economic uncertainty. According to Finance Minister Mehmet Şimşek, about $640 billion in gold and foreign currency is held outside the financial system, with Turkish households storing roughly 5,000 tons of gold worth approximately $600 billion. This practice, known as 'yastık altı altın' or 'gold under the mattress,' is a long-standing tradition that dates back to Turkey's history of high and unpredictable inflation.

Economist Selva Demiralp from Koç University explains that this behavior is a rational response to a chronic instability in the Turkish economy. She notes that nearly four in 10 people trust commercial banks close to zero, highlighting a severe credibility gap in institutions meant to manage and report on the economy.

Despite its benefits, gold hoarding has been criticized by Turkish officials and economists, who warn that it actively undermines the country's financial future. However, for many Turks, physical gold remains a safe way to protect their money from inflation and economic uncertainty.