Orhan Sait Berber
Turkey’s central bank reserves fell to $197.4 billion in the week of March 6, down from $210.2 billion a week earlier, amid market volatility linked to the war in neighboring Iran.
The decline was driven by losses in both foreign exchange and gold reserves.
Gross foreign exchange reserves dropped $10.6 billion to $62.7 billion, while gold reserves fell $2.1 billion to $134.7 billion.
Reserve losses could prompt further tightening
Banker and academic Şenol Babuşçu also warned on X that additional monetary tightening could come onto the agenda if reserve losses continue.
“If pressure on reserves persists, new tightening steps, including a potential interest rate hike, may need to be considered without delay,” he said.
Babuşçu added that energy prices, geopolitical developments and the decline in reserves should be evaluated together, saying economic authorities should be prepared for different scenarios.
Macroeconomist Özlem Derici Şengül said on X that Turkey’s central bank has lost more than $20 billion in reserves since the start of the conflict, adding that policymakers may rely more on alternative tools rather than the policy rate.
She said the central bank could consider raising the upper band of the interest rate corridor, which would allow interbank rates to rise further and help slow capital outflows.
Turkey’s central bank spent about $50 billion of its reserves within weeks during market turmoil in March 2025.
Markets experienced sharp volatility after the detention of İstanbul Mayor Ekrem İmamoğlu, widely seen at the time as President Recep Tayyip Erdoğan’s main political rival and ahead in opinion polls.