Turkey's Reserves Plunge $43.4 Billion in March as Iran War Sparks EM Selloff
Updated
Updated · Bloomberg · May 13
Turkey's Reserves Plunge $43.4 Billion in March as Iran War Sparks EM Selloff
1 articles · Updated · Bloomberg · May 13
$43.4 billion was wiped from Turkey's foreign reserves in March, balance-of-payments data showed, marking the country's biggest monthly decline on record.
The drop followed the Iran war's shock to emerging-market assets, which strained the lira and drove portfolio outflows that authorities partly countered with state intervention.
That reserve drain underscores how quickly external conflict can hit Turkey's financial buffers, especially as oil-related pressure and volatile lira trades already threaten the economy.
Will the Iran war's economic shock finally force Turkey to overhaul its controversial interest rate policies?
While global central banks hoard gold, is Turkey's record sell-off a desperate gamble or a strategic move?
With its currency in freefall, can Turkey's ambition to become a global financial hub possibly succeed?
Turkey on the Brink: Reserve Losses, Inflation, and the Risk of a $40 Billion Financial Meltdown
Overview
Turkey is facing a financial emergency as its central bank reserves come under severe pressure, driven by both long-standing economic weaknesses and new geopolitical shocks. Even before the Iran war in early 2026, Turkey struggled with a widening current account deficit and a weakened lira, reflecting deep economic imbalances. The outbreak of conflict led to surging oil prices and increased global demand for the U.S. dollar, making it harder for Turkey to pay for energy imports and service its debts. In response, the central bank sold large amounts of gold to stabilize the currency, but persistent inflation and credibility issues continue to threaten the country’s financial stability.