Turkey’s central bank sold about 22 tons of gold outright and used roughly 34 tons more in swap transactions to defend the lira and steady financial markets after the Iran conflict began, though the total decline in gold reserves has been blurred by a separate drop in global gold prices, according to Reuters, Bloomberg and Turkish economists.
The Central Bank of the Republic of Turkey’s gold reserves fell by nearly 50 tons last week to 772 tons, the biggest weekly drop since August 2018, Reuters reported Thursday, citing calculations by bankers based on central bank data.
Bloomberg reported separately that the bank sold and swapped about 60 tons of gold over two weeks after the conflict began, with the total market value of that decline exceeding $8 billion. The central bank declined to comment to both outlets.
The distinction between sales and swaps matters because swaps are liquidity operations that allow the central bank to obtain foreign exchange or liras temporarily using gold as collateral, not permanent sales into the market.
Economist Uğur Gürses said in a post on X that the central bank’s gold reserves fell by 56.6 tons over the past two weeks, but that about 34.4 tons came from gold-dollar swaps, leaving an estimated 22.2 tons in net outright sales. Economist İris Cibre also said roughly half of the 59 tons widely reported as sold was actually used in dollar swaps.
Reuters said the central bank has also sold about $26 billion in foreign currency since the Iran conflict began nearly a month ago as officials sought to limit pressure on the Turkish lira amid market volatility and rising energy costs. Bloomberg reported earlier this week that policymakers were considering tapping the country’s gold stockpile more broadly through transactions in London to help defend the currency from deeper losses linked to the regional conflict.
Turkey’s economy has faced mounting pressure since the February 28 start of the US-Israel military campaign against Iran. The lira has weakened, energy costs have risen due to regional instability and investor concerns about Turkey’s exposure to the conflict have increased market volatility.