Yields on Türkiye’s 10-year bonds hit record high amid foreign outflow
File photo shows a stack of 200 Turkish lira banknotes placed on a scattered pile of various Turkish lira denominations, accessed on February 2, 2025. (Adobe Stock Photo)
The yield on Türkiye’s benchmark 10-year government bond has surged past 35%, reaching a record high because of a recent wave of foreign investor outflows from the local debt market.
In the bond market, where prices and yields move inversely, the swift liquidation of substantial foreign holdings in Türkiye’s debt has triggered a steep drop in bond prices and pushed yields to record highs.
According to weekly statistics published by the Central Bank of the Republic of Türkiye (CBRT), foreign investors have sold approximately $8 billion worth of Turkish government bonds since March 21, 2025.
The sell-off was triggered by a combination of domestic and global uncertainties.
Half of the Turkish bond inflows recorded in 2024 have flowed out
This shift in investor behavior signals a significant reversal of the positive momentum that had developed in the Turkish bond market over the past year.
During 2024, Türkiye experienced a period of strong foreign demand for local bonds, supported by the orthodox economic policies implemented by the Treasury and Finance Minister Mehmet Simsek and the Central Bank Governor Fatih Karahan.
Throughout that year, foreign investors made a net purchase of around $16 billion in Turkish bonds.
The positive trend extended into early 2025, with foreign investors buying an additional $3.6 billion in bonds by the week of March 21.
However, recent developments have disrupted this trend, leading to renewed volatility.
At the same time, Türkiye’s credit default swap (CDS) premium — a key indicator of sovereign default risk — has risen back above 300 basis points, reflecting mounting concerns in financial markets over the potential economic fallout.
