Gold Exports to U.K. Heals Turkey Trade Deficit in May

  • Gold makes up nearly half of exports to UK, biggest market
  • 9.6 percent annual rise in exports highest since 2014

Turkish gold shipments surged more than 10-fold in May from a year earlier, led by a big jump in sales to the U.K., helping to patch the gap in Turkey’s foreign trade.

Gold worth more than $1.1 billion was exported in May, compared with $90 million a year earlier, accounting for almost all of the 9.6 percent annual rise in Turkish exports last month, according to data released by the state statistics institute on Thursday. The rise in shipments of goods abroad was the largest since March 2014.

The increase in gold exports along with a shrinking energy import bill narrowed Turkey’s trade gap to $5.05 billion, in line with the median estimate in a Bloomberg survey. The U.K. bought half of the gold, or $596 million worth, to become Turkey’s top export destination last month, compared with No. 2 in all of 2015. Iran, Switzerland and the United Arab Emirates imported most of the rest, according to official data.

Although it has no significant gold deposits, Turkey exported $4.1 billion worth in the first five months of the year, compared with $5.5 billion during the same period in 2015. A gold importer for 28 of the past 31 years, it became a net exporter in 2012 when it started paying for Iranian gas in precious metals to circumvent international sanctions. Reza Zarrab, an Iranian gold trader at the center of a government corruption scandal who facilitated Turkish gold exports, is now on trial for sanctions busting in New York.

The lira was trading 0.3 percent higher at 2.8835 per dollar at 11:17 a.m. in Istanbul.

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