Turkey Liquidated Almost All US Treasury Holdings in March

594omyj2io2(oxn7ts66m(1h_media_dl_1.png US Treasury, Bloomberg

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(Bloomberg) — 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. 

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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.

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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. 

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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.

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“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. 

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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.

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The central bank typically does not comment on its interventions and it declined to comment on the sales of US Treasuries.

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Reserve stress

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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. 

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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.

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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. 

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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%.  

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—With assistance from Tugce Ozsoy.

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(Adds investor quote and context on Turkish court decision.)

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