Turkish central bank’s reserve losses top $14B in two weeks, official data shows

The Central Bank of the Republic of Türkiye (CBRT) saw its total reserves fall by $6.6 billion in the week ending March 28, bringing the total down to $156.51 billion, according to official data released Monday.

Since March 14, reserves have declined by more than $14.5 billion.

The sharp drop comes amid heightened market volatility triggered by a corruption probe targeting Istanbul Mayor Ekrem Imamoglu on March 19. The investigation sent shockwaves through financial markets, causing the Turkish lira to plummet past 41 against the U.S. dollar.

In response, the central bank reportedly sold $25 billion in reserves, helping the lira trim its losses. By the end of the week, the lira had recovered slightly, with the USD/TRY exchange rate retreating to the 38 level, still down around 4%.

According to the central bank’s weekly data, gross foreign exchange reserves declined by $7.72 billion to $80.61 billion as of March 28. Meanwhile, gold reserves rose by $1.12 billion to reach $75.90 billion, up from $74.79 billion the previous week.

Foreign investor outflow from Istanbul stocks

Foreign investors accelerated their exit from Turkish markets during the same week. According to the central bank’s weekly securities statistics, non-resident investors sold $651.9 million worth of equities and $2.39 billion in government bonds, amounting to a total net sale of $3.04 billion.

Equity outflows reached their highest level since the week of June 7, 2024. Combined with the previous week’s activity, total foreign sales in the Turkish stock market approached $4 billion over two weeks, with equity market outflows alone reaching $1.1 billion.

The share of non-resident investors in Türkiye’s government bond holdings dropped sharply—from 10.03% in the week of March 21 to 8.56% in the week ending March 28—returning to levels last seen in September 2024.

Interestingly, despite the overall sell-off, the total value of equities held by foreign investors rose from $28.76 billion to $29.20 billion during the same period, possibly reflecting valuation changes or selective repositioning.

Meanwhile, foreign holdings of government domestic debt securities (DIBS) fell from $18.70 billion to $15.80 billion, and corporate bond (OST) holdings decreased from $716 million to $666.3 million.