Almost liquidation! Under the shadow of the Iran war, Turkey threw out more than one billion dollars in March to defend the lira.

According to calculations by relevant institutions based on data from the US Treasury Department, Turkey almost sold all of its US Treasury bonds in March, as the first month of the Iran war outbreak, Turkey increased its efforts to support its currency. Data shows that by the end of March, Turkey's holdings of US bonds plummeted from $16 billion in February to $1.8 billion. This number includes US bonds held by the Central Bank of Turkey and other domestic entities (including companies). The reduction in holdings occurred as the Turkish market faced a sell-off and a sharp rise in oil prices following the outbreak of the Middle East conflict. To curb the significant depreciation of the Turkish lira, the Central Bank of Turkey quickly took action, intervening in the market through tightening financing conditions, selling foreign exchange and gold assets, and measures including using gold from foreign exchange reserves for substitution. The Central Bank of Turkey usually does not comment on its intervention measures and has also declined to respond to the sale of US bonds. After a year of rebuilding foreign exchange reserves, Turkey's holdings of US bonds reached a high of $201 billion in February 2025. About ten years ago, this number reached a peak of $80 billion, but has since continued to decline due to deteriorating relations between Turkey and the US in a series of political and geopolitical disputes. The available data is up to March, and data for April is expected to be released next month. Despite the intervention measures taken by the Central Bank of Turkey, the lira continues to face pressure as the conflict persists. Last week, after data showed that the annual inflation rate accelerated to 32.4%, the Central Bank of Turkey raised its year-end inflation target from 16% to 24%. Turkish bonds also experienced a significant decline, with the yield on ten-year bonds reaching a historical high of 35.75%.