Turkey has depleted its foreign exchange reserves to a record low due to the war in Iran
According to Turkey’s balance of payments data, the country’s foreign assets fell by an unprecedented $43.4 billion in March 2026. This marked the largest monthly decline in reserves in history, driven by capital outflows and government currency interventions to prop up the lira.
This was reported by Bloomberg.
Turkey’s current account deficit widened to $9.7 billion in March from $7.3 billion in February. As a major energy importer, the country was hit hard by the surge in oil and gas prices caused by the de facto closure of the Strait of Hormuz and disruptions in global supplies. Due to the deteriorating indicators, financial giants such as BofA and Barclays have begun to abandon their positive forecasts for the Turkish currency.
Inflationary pressure in Turkey continues to rise, reaching 32.4% in April compared to 30.87% in March on an annualized basis. The central bank is currently keeping the base rate at 37%, but is effectively lending at a rate of 40% to restrict liquidity without an official hike. It is expected that the regulator will soon revise its annual inflation forecast, currently set at 16%, upward by a significant margin.
Earlier, analysts at Chainalysis identified a trend toward the growing popularity of cryptocurrencies and stablecoins in Turkey amid the rapid decline of the Turkish lira. Mass protests took place in the country due to the collapse of the national currency, and President Erdogan was forced to dismiss the finance minister.
