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Türkiye’s holdings of U.S. Treasury securities plunged in March, with the country offloading nearly 89% of its portfolio amid a broader sell-off in government debt markets as the Iran war stoked inflation fears.
Data released by the U.S. Treasury Department showed Türkiye’s total stock of U.S. government debt fell from $15.7 billion in February to $1.8 billion in March after roughly $14 billion in net sales.
Türkiye’s long-term U.S. Treasury holdings fell to $839 million in March after $10.3 billion in net sales, while short-term holdings dropped to $945 million following another $3.7 billion in sales.
The figures reflected a sharp reversal from previous months, as Türkiye’s total U.S. Treasury holdings had climbed to $16.9 billion in January from $14 billion in December 2025.
Beyond Türkiye, the net change in total U.S. Treasury holdings by foreign governments during the period stood at $138.4 billion, while overall foreign holdings fell to $9.25 trillion in March from $9.49 trillion a month earlier, according to the data.
China cut its Treasury holdings to $652.3 billion, down around 6% from February and falling to their lowest level since September 2008, CNBC reported. Japan, the largest foreign holder of U.S. government debt, shed roughly $47 billion, bringing its holdings down to $1.2 trillion.
The steep decline came as major economies collectively reduced their U.S. Treasury exposure in March to inject dollar liquidity into domestic markets and shield local currencies from mounting volatility.
The appeal of government debt instruments also weakened amid expectations of tighter monetary policy and renewed global inflation fears fueled by rising energy prices following the closure of the Strait of Hormuz.
Turkish policymakers tapped dollar reserves to manage intense pressure on the Turkish lira during the Iran war, which rattled regional markets and drove energy prices higher. The Turkish central bank sold nearly $60 billion during peak demand in late March to prevent the lira from weakening sharply.
Similarly, Japan is estimated to have spent around 10 trillion yen ($64 billion) since late April to support the yen after it slid near 160 against the dollar, nearly doubling the scale of its July 2024 intervention.
The yield on the 10-year U.S. Treasury traded around 4.615% on Tuesday, its highest level since October 2023, while a move toward 5% would push it to levels last seen in 2002.
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