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A sharp erosion in Türkiye's central bank reserves was recorded last week, with total losses since the Iran war reaching $56.7 billion, as sustained market pressure forced heavy interventions to support the lira.
Data from the Central Bank of the Republic of Türkiye showed net international reserves fell by $22.3 billion in the week ending March 27, marking the steepest weekly decline on record. That drop pushed net reserves down to $35 billion. When excluding swaps, reserves slid further to $20.1 billion.
Gross reserves shrank notably, with total reserves falling by $22.2 billion, or 12.5%, to $155.3 billion, while gold holdings mirrored the decline, dropping $16.2 billion, or 13.9%, to $100 billion. Reuters calculations based on bankers’ estimates show the central bank conducted 42 tons of gold swaps and sold 26 tons last week, with two-week totals reaching 48 tons in sales and about 73 tons in swaps.
The losses reflect aggressive steps by the central bank to steady the Turkish lira as global conditions turned more hostile.
A stronger U.S. dollar, rising energy costs, and disruptions tied to the war weighed on Türkiye’s disinflation path, prompting capital outflows.
Non-residents bought $137.1 million in equities but sold $1.4 billion in government bonds over the same week, pushing cumulative outflows to $1 billion in equities and $6.1 billion in bonds since the start of the conflict.
Carry trade positions also thinned, falling to $37.6 billion after a $21.5 billion monthly outflow.
Banking sector deposits slipped 1.2% during the week, down ₺355.3 billion ($8 billion) to ₺29.05 trillion ($652.8 billion).
Foreign currency deposits stood at $263.8 billion, with residents holding $226.7 billion, while their FX holdings rose by $2.2 billion.
To contain volatility, the bank supplied liquidity to local lenders using its reserves. Policymakers also leaned on gold reserves through swaps and partial sales while relaunching dollar-to-lira swap auctions earlier this week after a year-long pause.
"Our primary objective in maintaining reserves is to reinforce confidence in monetary and exchange rate policies and to protect our economy against likely adverse effects of global and geopolitical developments," Karahan told state-run Anadolu Agency.
He added that authorities are following "a proactive, flexible, and controlled approach" in managing reserves and liquidity tools, aiming to support price and financial stability.
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