Turkish central bank reserves post largest weekly decline since May 2023

The Central Bank of the Republic of Türkiye (CBRT) reported Thursday that its total reserves fell by $7.97 billion to $163.1 billion in the week ending March 21, amid market fluctuations triggered by escalating political tensions.

This marked the steepest weekly decline in total reserves since May 2023.

In a meeting with foreign investors on Tuesday, CBRT Governor Fatih Karahan confirmed that over $25 billion from the reserves had been sold as part of intervention efforts to stabilize the Turkish lira following market turmoil prompted by a corruption probe into Istanbul Mayor Ekrem Imamoglu.

Foreign exchange reserves dropped from $98.1 billion on March 14 to $88.3 billion—a decrease of $9.74 billion, according to the CBRT data. In contrast, gold reserves rose by $772 million, climbing from $74.01 billion to $74.79 billion over the same period.

Net international reserves decreased by $11.8 billion to $62.1 billion, returning to end-2023 levels. Excluding swaps, net reserves dropped by $13.2 billion to $52.2 billion, the sharpest fall since April 2020.

Meanwhile, domestic residents’ foreign currency deposits—adjusted for parity effects—increased by $5.9 billion, marking the highest weekly rise of the year. Since the beginning of 2024, these deposits have risen by a total of $15.8 billion, also adjusted for parity.

Foreign outflows from Turkish assets reach $880 million

The same week, foreign investors sold $443.8 million in equities and $439.5 million in government domestic debt securities while purchasing $3.4 million in non-government domestic sector assets.

This resulted in a total net divestment of approximately $880 million from Turkish financial markets.

Based on current valuations, foreign investors’ total equity holdings stood at $28.76 billion as of March 21, down from $35.81 billion a week earlier.

Over the same period, their holdings of government debt securities fell from $20.88 billion to $18.70 billion, while non-government domestic sector assets declined slightly from $739.3 million to $716 million.