Foreign investors are pouring back into Turkey, drawn by the lira’s 40% effective yield and easing geopolitical risk as the U.S. and Iran edge toward a peace accord. Carry‑trade inflows have lifted total FX positions to roughly $30 billion, while local‑currency bond exposure sits near $15 billion, sources said. The surge follows months of capital outflows triggered by the Iran conflict and domestic unrest.

Last week alone attracted at least $6 billion of carry‑related money, according to unnamed bankers. Investors borrow cheap dollars, euros or yen and park the funds in lira‑denominated assets, betting on the central bank’s “real appreciation” policy that caps monthly depreciation below inflation. Forward yields on one‑month and three‑month lira contracts fell to 32% and 35%, near pre‑war levels this week.

Banks such as Bank of America, JPMorgan and Barclays, which dumped lira bets in May, are now rebuilding exposure, signaling renewed confidence. The central bank used recent foreign‑currency inflows to replenish reserves, buying roughly $9 billion last week, according to QNB Turkey. With funding costs stable, the lira’s high yield remains a magnet for yield‑hungry capital for global investors seeking returns.