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    Turkey's gold reserves slumps to 3.5-year low

    Consequently, the Turkish lira, may face a new wave of devaluation

    Baku. 28 December. REPORT.AZ/ Turkey's gold reserves decreased by 137 tons or 26.6% and amounted to 378 tons in 2016. Report informs citing the Hurriyet newspaper, this is the minimal level of gold reserves in last 3.5 years.

    Notably, according to the Central Bank of Turkey (CBT), 116 tons of gold or 30.7% from total 378 tons are bank's assets, the remaining 262 tons are reserves of commercial banks' assets in the form of obligatory that may be withdrawn at any time. Thus, in 2011, banks were permitted to take obligatory reserves in the form of gold. After the decision of the Central Bank gold reserves ascended 4 times from 116 tons to 519 tons.

    Though analysts linked decline in foreign exchange reserves in banks with liquidity shortages, reduction in gold reserves is a result of limits in lending.

    The main decrease in gold reserves of the Central Bank took place on September 23 after "Moody's" International Rating Agency, lowered independent rating.After this date, the Central Bank's foreign exchange reserves amounted to 7.6 bln USD, gold reserves - 4.2 bln USD. The credit rating is expected to be lower by "Fitch" in the near future.Rumors regarding the application of the restrictions on the movement of capital and foreign investors away from Turkey could lead to a further reduction of the Central Bank's reserves.

    Consequently, the Turkish lira, may face a new wave of devaluation.

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