A surge of money into Turkish lira assets is creating a dilemma for policymakers, who are weighing how to curb speculative short-term flows without choking off an important source of support for the currency.

Foreigners have pumped an estimated $75 billion into high-yielding currency derivatives and money market funds, drawn by Turkey's 37% benchmark interest rate, among the highest in the world. The flows are part of the carry trade, in which investors borrow cheaply overseas and invest where yields are higher.

The rapid inflows have helped stabilize the lira in recent months, but officials are concerned about the risks of such hot money, which can reverse quickly if global conditions change or Turkish rates fall. Policymakers face a difficult balance between attracting foreign capital to support the currency and avoiding destabilizing outflows.

The article is by Beril Akman, Tugce Ozsoy, and Kerim Karakaya, published September 2, 2026.