Middle East Eye
News | Inside Turkey
Turkey liquidates nearly all US Treasuries as Iran war bites economy: Report
Turkey sold $14bn in US Treasuries as it moved to support the lira
This picture taken in Istanbul, Turkey, shows people looking at foreign exchange rates displayed against the Turkish lira, on 21 April 2024 (Yasin Akgul/AFP)
By MEE staff
Published date: 21 May 2026 20:11 BST | Last update: 1 day 16 hours ago
Turkey sold almost all of its US Treasury holdings in March, in a sign of the deep economic pressure the country’s economy has come under as a result of the US-Israeli war on Iran.
Turkey liquidated around $14bn in US Treasuries, bringing its total holdings of US debt to just $1.6bn dollars, Bloomberg reported on Thursday, citing its own estimates based on US government data.
Turkey’s vulnerable economy has been hit on multiple fronts by the US-Israeli war on Iran.
The country imports nearly all of its oil and gas from abroad. Rising energy prices have made those imports more expensive. Turkey also imported about 14 percent of its natural gas from Iran before the war, but those flows reportedly stopped after an attack on Iran’s South Pars gas field.
Rising energy prices have also sparked global inflation concerns, sending US Treasury yields higher. The rise in yields has increased Turkish borrowing costs and made its riskier debt less attractive to foreign investors.
New MEE newsletter: Jerusalem Dispatch
Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters
Your email
A country like Turkey typically sells its holdings of US debt to raise US dollars, which it then sells in the foreign-currency market to support its own currency. The lira has been on a downward spiral for years, with Turkey battling persistent inflation.
Some shipping industry professionals eye leaving Dubai for Greece
Read More »
The Turkish Central Bank in May increased its inflation target for 2026 to 24 percent from 16 percent, citing “elevated uncertainty”.
JP Morgan and Deutsche Bank forecast inflation to hit 30 percent in Turkey this year. The lira has also depreciated around five percent against the US dollar since the war on Iran started, making imports priced in dollars, such as oil and gas, more expensive.
Turkey’s US Treasury holdings fluctuate but have generally declined as the country tries to protect its currency. They reached a high of $80bn a decade ago.
Turkey is a relatively small holder of US debt compared to other Middle East heavyweights. For example, Saudi Arabia has about $150bn in US Treasuries and the UAE $114bn.
If enough countries sell US Treasuries, yields rise, making borrowing costs for the US government and American consumers more expensive.
Reuters reported on Thursday that Turkey sold $8bn to support the lira after a Turkish court annulled the party congress that elected Ozgur Ozel as the chairman of the largest opposition party, effectively ousting him.
Middle East Eye delivers independent and unrivalled coverage and analysis of the Middle East, North Africa and beyond. To learn more about republishing this content and the associated fees, please fill out this form. More about MEE can be found here.
No comments:
Post a Comment