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Turkish central bank reserves fall by over $1B as gold prices swing

File photo shows the entrance of the Central Bank of the Republic of Türkiye (CBRT) headquarters in Ankara, Türkiye, accessed on Mar. 22, 2025. (Adobe Stock Photo)
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File photo shows the entrance of the Central Bank of the Republic of Türkiye (CBRT) headquarters in Ankara, Türkiye, accessed on Mar. 22, 2025. (Adobe Stock Photo)
July 04, 2025 11:20 AM GMT+03:00

Türkiye’s central bank reserves fell by over $1.2 billion in the week ending June 27 as gold reserves slightly declined due to market fluctuation, while foreign investors continued to show confidence in local financial assets, purchasing hundreds of millions of dollars' worth of Turkish securities.

Meanwhile, banking sector deposits surged significantly, reflecting continued lira and foreign currency inflows.

Türkiye’s net reserves dip below $30B

The (CBRT) reported that total international reserves dropped to $154.4 billion in the week ending June 27, down from $155.7 billion the previous week. This $1.29 billion decline was largely driven by a sharp fall in gold reserves.

Gross foreign currency reserves increased slightly by $398 million, reaching $71.1 billion. However, gold holdings dropped by $1.69 billion, settling at $83.3 billion. As a result, the net reserves excluding swaps declined by $1.8 billion to $28.4 billion.

Column charts illustrate the Turkish central bank’s total reserves, broken down into gold and gross foreign exchange components, showing fluctuations over time, updated as of June 27, 2025. (Chart by Onur Erdogan / Türkiye Today)
Column charts illustrate the Turkish central bank’s total reserves, broken down into gold and gross foreign exchange components, showing fluctuations over time, updated as of June 27, 2025. (Chart by Onur Erdogan / Türkiye Today)

Strong interest from non-residents in Turkish assets

Despite the decrease in reserves, Türkiye attracted substantial foreign capital over the same week. According to the CBRT’s weekly securities statistics, non-resident investors purchased $247.7 million worth of equities and $305.1 million of domestic government bonds, officially known as Government Debt Securities (GDS). Additionally, they acquired $110.5 million of private sector debt instruments.

Foreigners’ total holdings of Turkish stocks rose to $28.64 billion from $28.06 billion a week earlier. Their GDS holdings also increased, reaching $11.9 billion, while their investments in non-sovereign domestic debt grew to $777.6 million from $670.2 million.

Lira and FX deposits rise as banking sector expands

Türkiye’s banking sector saw notable growth in total deposits during the week ending June 27. Total deposits rose by ₺486.6 billion to reach ₺24.27 trillion ($956.39 billion), posting a significant increase from ₺23.78 trillion the previous week.

Breaking this down, Turkish lira-denominated deposits increased by 2.6% to ₺13.51 trillion. Foreign currency deposits also edged up by 0.8%, reaching ₺7.7 trillion. The total foreign exchange deposits in banks stood at $234.1 billion, with $194.1 billion held by domestic residents.

After adjusting for exchange rate effects, the foreign currency holdings of residents rose by $677 million over the week.

Credit volume continues upward trajectory

In parallel with deposit growth, the banking sector’s total loan volume—including credits extended by the central bank— expanded by nearly ₺299 billion, reaching ₺18.89 trillion. This trend indicates rising domestic lending activity, likely spurred by improving investor sentiment and a gradual easing in financial conditions.

July 04, 2025 11:20 AM GMT+03:00
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