Turkey offloaded almost all of its US Treasury holdings in March, cutting its total to $1.8 billion from $16 billion the month before. The Central Bank’s rapid sell‑off coincided with a sharp rise in oil prices and a sell‑off in Turkish markets triggered by the Iran conflict.

The move followed a year‑long rebuild that saw Turkish reserves peak at $21 billion in February 2025, down from a decade‑high of $80 billion. By shifting foreign‑exchange and gold assets, the bank tightened funding conditions to stem lira depreciation.

Despite these interventions, the lira remains pressured; the bank lifted its year‑end inflation target to 24% from 16% after annual inflation surged to 32.4%. Turkish bonds have suffered steep losses, with 10‑year yields reaching record highs of 35.75%, underscoring the currency’s fragility.