Turkey’s holdings of US Treasury securities fell by nearly 89 percent in March as the country used liquid foreign assets during its defense of the lira triggered by the Iran war and energy market shock, Intellinews reported, citing official US data.
Treasury International Capital data show Treasury securities attributed to Turkey fell to $1.78 billion at the end of March from $15.72 billion in February and $16.9 billion in January. Long-term Treasury holdings fell to $839 million from $11.05 billion, while short-term holdings fell to $945 million from $4.66 billion. The same table recorded a $13.98 billion negative net sales figure for Turkey in March, meaning a reduction in Treasury positions attributed to Turkish residents.
The figures point to a sharp liquidation of dollar assets at a time when Turkey’s central bank was selling reserves to meet foreign currency demand and keep the lira from falling faster. The US data do not prove that the central bank was the only seller because Treasury International Capital data are based on custodian and broker-dealer reporting, and the US Treasury warns that holdings through third countries may not be attributed to the final owner.
The Turkish Central Bank’s balance of payments data recorded a $43.42 billion decline in reserve assets in March. Bankers calculated a roughly $55 billion drop in Turkey’s total reserves in the first month of the Iran conflict, while the central bank had also begun selling and swapping gold reserves, Reuters reported at the time.
The central bank sold about $8 billion in foreign currency in one day after US and Israeli attacks on Iran triggered a selloff in Turkish assets, Reuters reported on March 2. The lira reached 43.99 against the dollar that day, an all-time low at the time, before recovering some losses.
The March liquidation also followed a surge in Turkey’s Treasury holdings in previous months. The country’s total US Treasury position had climbed to $16.9 billion in January from $14 billion at the end of 2025 before falling to $15.72 billion in February and $1.78 billion in March.
The selloff came as foreign holders reduced their exposure to US government debt. Foreign holdings of US Treasuries fell 1.5 percent to $9.348 trillion in March from a record $9.487 trillion in February, led by Japan and China, according to US Treasury Department data.
Turkey is exposed to energy shocks because it imports much of the energy it consumes. Fitch Ratings said in April that a longer Iran conflict could put more pressure on Turkey’s external finances and inflation because of the country’s energy trade deficit.
The Iran war has also disrupted the Strait of Hormuz, a waterway that carried oil and liquefied natural gas shipments equal to about 20 percent of global consumption before the conflict. The strait remains mostly closed, keeping pressure on oil prices and import-dependent economies.
The central bank’s lira defense marks another test of President Recep Tayyip Erdoğan’s economic team, which has tried since 2023 to restore investor confidence through high interest rates and a return to more conventional monetary policy after years of low-rate policies that fueled inflation and currency losses.