Turkey offloaded almost all of its US Treasuries in March as it stepped up efforts to defend the lira amid intense economic pressure from soaring energy costs.
The amount of Treasuries held by Turkey fell to $1.8 billion by the end of March, down from $16 billion the previous month, according to Bloomberg-compiled estimates based on official US data. The figure includes securities held by the central bank and other Turkish entities, including companies.
Turkey has taken dramatic action in recent weeks to prevent a depreciation in the lira as the country, which needs to import almost all its energy, grapples with the effects of higher oil prices stemming from the US-Iran war. Turkish markets were pitched into more turmoil on Thursday after a court removed the leader of the main opposition party.
State lenders sold about $6 billion on Thursday to defend the lira, traders said, while the benchmark Borsa Istanbul 100 Index plunged 6.1% at the close.
“We are seeing severe pressure from FX markets because many investors are worried about Turkey’s trade deficit and political risk, which can be a difficult combination,” said Manuel Mondia, a portfolio manager at Aquila Asset Management AG.
In recent weeks, the central bank has tightened funding conditions and sold off foreign exchange and gold assets. Its interventions also included swapping gold from reserves.
The central bank typically does not comment on its interventions and it declined to comment on the sales of US Treasuries.
Reserve stress
Turkey’s Treasury sales are part of a wider pattern across the developing world, where many countries are resorting to increasingly aggressive measures to support their currencies, including foreign-exchange interventions and interest rate hikes.
Globally, foreign holdings of Treasuries dropped fell by $138.4 billion from February, with the selling driven mainly by central banks. March is the last month for which data is available, with April figures due to be released next month.
In Turkey, the decline was particularly dramatic. Its Treasury holdings were as high as $21 billion in February 2025. They had peaked about a decade ago at $80 billion, before steadily falling as relations with the US soured over a range of political and geopolitical disputes.
Still, despite the interventions, the lira has remained under pressure as the war drags on. Last week, the central bank sharply raised its year-end inflation target to 24%, after data showed annual inflation accelerated to 32.4%. Turkish bonds have also suffered steep losses, with 10-year yields hitting record highs of 35.75%.
Written by: Beril Akman and Selcuk Gokoluk — With assistance from Tugce Ozsoy @Bloomberg
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