 for 2025, according to its year-end balance sheet published in the Official Gazette on Friday.){kind=link}
The Turkish Central Bank has reported a net loss of TL 1.06 trillion ($23.84 billion) for 2025, according to its year-end balance sheet published in the Official Gazette on Friday.
The result extends a series of large losses in recent years and shows the financial cost of recent economic policies.
The balance sheet, covering the period ending December 31, 2025, showed total assets of TL 12.4 trillion ($277.6 billion). The bank’s gold holdings stood at TL 4.82 trillion ($107.8 billion), while its reserve fund was TL 334 million ($7.48 million).
The 2025 loss corresponds to roughly 1.7 percent of Turkey’s gross domestic product, making it a significant financial burden.
Shift in sources of losses
The central bank also posted heavy losses in 2023 and 2024, largely linked to a currency-protected deposit scheme, known as the KKM.
The controversial scheme was launched in late 2021 after a currency meltdown caused the lira to lose 44 percent of its value that year. It allowed individuals and businesses to place lira in special accounts guaranteed against exchange rate losses. The program created significant financial costs over time.
The bank recorded a loss of more than TL 818 billion ($18.3 billion) in 2023 and more than TL 700 billion ($15.7 billion) in 2024. Economists say those losses were driven mainly by KKM payments and the cost of maintaining low-yield financial positions.
The current economic program was introduced after the 2023 elections, replacing years of unorthodox policies that relied on cheap credit to drive growth but contributed to rising inflation and a weakening currency. The new approach aims to reduce inflation while supporting production and exports and narrowing the current account deficit.
In 2025, however, the sources of losses appear to have shifted.
Hakkı Hakan Yılmaz, a professor at Ankara University and a director at the Economic Policy Research Foundation of Turkey (TEPAV), told the Anka news agency that the latest losses were largely linked to interest payments stemming from monetary policy operations.
These include interest paid to absorb excess liquidity through open market operations, payments on required reserves held by banks and interest paid on Treasury lira accounts.
High inflation and high interest rates increased these costs, turning routine policy tools into a source of financial losses, Yılmaz said.
Turkey has experienced double-digit inflation since 2019, making life increasingly more expensive for millions of people after President Recep Tayyip Erdoğan pushed for interest rate cuts in a bid to spur economic growth. But the policy led to a sharp depreciation of the lira, fueling inflation and prompting a policy reversal after the 2023 elections.
Turkey has maintained tight monetary and fiscal policies for more than two years now as it tries to curb inflation, a strategy that has pushed borrowing costs higher for businesses and households. Inflation has eased gradually but remains elevated, standing at about 31 percent annually.
The central bank raised its key interest rate to 50 percent in 2024 as part of its inflation-fighting efforts before gradually lowering it to 38 percent in 2025.
No profit transfer to Treasury
The continued losses mean the central bank is not expected to transfer profits to the Treasury for 2025.
In previous years, such transfers accounted for around 2 percent of budget revenue on average and reached higher levels in some years.
The absence of this income reduces government revenue and adds pressure to the budget, although central bank losses are accounted for differently from standard fiscal spending.
KKM phaseout
Turkey began phasing out the KKM scheme in 2025 as part of a broader shift toward more conventional economic policies.
The central bank announced in August 2025 that it had stopped opening and renewing KKM accounts, although existing deposits remain valid until maturity.
Deposits under the scheme peaked at around $140 billion before declining sharply during the phaseout process.
Turkey is not alone in reporting central bank losses.
The US Federal Reserve reported an operating loss of $18.7 billion in 2025, while the European Central Bank posted a loss of 1.25 billion euros.
Such losses are largely linked to high interest rates, which increase the cost of central bank operations.
Economists stress that central bank losses do not carry the same meaning as losses in private companies.
Unlike commercial firms, central banks issue currency and can continue to operate with negative income, although persistent losses may raise questions about policy costs and long-term financial balances.