According to calculations based on U.S. Treasury data, Turkey sold off nearly all its U.S. Treasury holdings in March, a move that coincided with the first month of the Iran conflict as Turkey intensified efforts to support its national currency. Data shows that by the end of March, Turkey's holdings of U.S. Treasuries plummeted from $16 billion in February to $1.8 billion. This figure includes U.S. Treasury holdings by the Central Bank of the Republic of Turkey and other domestic entities, including corporations.

The reduction occurred amid a sell-off in Turkish markets and a sharp surge in oil prices following the outbreak of conflict in the Middle East. To curb significant depreciation of the lira, the Central Bank of the Republic of Turkey swiftly intervened by tightening financing conditions and selling foreign exchange and gold assets. Its measures also included utilizing gold from its foreign exchange reserves for swaps. The Central Bank of the Republic of Turkey typically does not comment on its interventions and declined to respond to inquiries regarding the sale of U.S. Treasuries.

After a year of rebuilding its foreign exchange reserves, Turkey's U.S. Treasury holdings had reached a high of $21 billion as of February 2025. Approximately a decade ago, these holdings peaked at around $80 billion before declining steadily due to deteriorating relations between Turkey and the United States over a series of political and geopolitical disputes.

The latest available data is for March, with April figures expected to be released next month. Despite the central bank's interventions, the lira remains under pressure as the conflict persists. Last week, following data showing annual inflation accelerated to 32.4%, the Central Bank of the Republic of Turkey raised its year-end inflation target from 16% to 24%. Turkish bonds also experienced significant declines, with the yield on 10-year government bonds hitting a record high of 35.75%.