In Istanbul’s Grand Bazaar, Demand for Gold and Dollars Soars

Turks are pouring their money into assets that they hope will be a safer bet than the lira By Jared Malsin and Elvan Kivilcim | Photographs and videos by Emanuele Satolli for The Wall Street Journal Aug. 10, 2023 Tap story

This browser does not support the video element. This is the stone warren of Istanbul's 560-year-old Grand Bazaar.

A cluster of traders selling gold and dollars pace the alleyway, murmuring into phones and smoking. The tension rises as demand grows. A shout comes from the crowd: “I’ve got it ready!” { "selector": ".wsj--ani-media-pan", "duration": "10s", "easing": "ease-out", "fill": "forwards", "keyframes": [ {"transform": "translateX(-15px) scale(1.1)"}, {"transform": "translateX(15px) scale(1.1) "} ] }

Turks are pouring money into foreign currency, gold, cryptocurrency, jewelry and other assets that they see as a safer bet than the Turkish lira, which has lost more than 80% of its value in the past five years. { "selector": ".wsj--ani-media-zoom", "duration": "3s", "easing": "ease-out", "keyframes": [ {"transform": "scale(1.03)"}, {"transform": "scale(1)"} ] } Read more

This browser does not support the video element. “There’s an atmosphere of panic,” said Mustafa Demiray, a currency trader. “People think the price [for dollars] will go up, so there’s a higher demand right now.” { "selector": ".wsj--ani-media-pan", "duration": "10s", "easing": "ease-out", "fill": "forwards", "keyframes": [ {"transform": "translateX(-15px) scale(1.1)"}, {"transform": "translateX(15px) scale(1.1) "} ] }

This browser does not support the video element. The collapse of the lira is the result of an era of economic mismanagement by Turkish President Recep Tayyip Erdogan, economists say.

The Turkish leader in recent years has pressured the central bank into cutting interest rates despite the country’s high rate of inflation—the opposite of what central banks would usually do. { "selector": ".wsj--ani-media-zoom", "duration": "3s", "easing": "ease-out", "keyframes": [ {"transform": "scale(1.03)"}, {"transform": "scale(1)"} ] }

Turks and other traders must contend with a complex web of rules imposed by the government to scare up foreign currency and keep the country from tipping into insolvency. { "selector": ".wsj--ani-media-pan", "duration": "10s", "easing": "ease-out", "fill": "forwards", "keyframes": [ {"transform": "translateX(-15px) scale(1.1)"}, {"transform": "translateX(15px) scale(1.1) "} ] }

This browser does not support the video element. “In general, in our line of work, crisis makes money,” said gold trader Mehmet Akif Turker. “But when the dollar fluctuates so much and the market is so unstable, it can bring us profit or it can bring us losses. We are exhausted.” { "selector": ".wsj--ani-media-zoom", "duration": "3s", "easing": "ease-out", "keyframes": [ {"transform": "scale(1.03)"}, {"transform": "scale(1)"} ] }

This browser does not support the video element. Despite the government’s efforts to bring gold and other assets out from “under the mattresses” of the country’s citizens and into the financial system, Turks continue to pour money into precious metals.

This browser does not support the video element. Industry groups estimate that between $200 billion and $300 billion worth of gold is in Turkish citizens’ private possession.

This browser does not support the video element. “In order to stop their money from melting away in case of inflation, people are trying to make use of their gold investments by continuously buying and selling," said shop owner Ercan Doner.

Volatility in the economy isn’t the only driver of gold sales, vendors say. The pandemic also increased business, said Metin Kocatepe, a salesman from another jewelry shop.

This browser does not support the video element. People think 'maybe tomorrow I'm gonna die, I'll buy something nice,' said Kocatepe. Read the full story

Photo Editor : Marina Vitaglione Read the full story