Turkey slashed its US Treasury holdings by nearly 90% in March, cutting from $16 billion to $1.8 billion, using a lira defense strategy to cope with market turmoil.

⑴ Data from the US Treasury shows that Turkey sold almost all of its US Treasuries in March, with its holdings plummeting from $16 billion to just $1.8 billion. ⑵ This sell-off coincided with Turkey’s efforts to support the lira’s exchange rate during market turbulence triggered by the Iran war; the country’s central bank also tapped into its foreign exchange and gold reserves to stabilize the economy. ⑶ Despite the intervention, the lira remains under pressure, inflation has risen to 32.4%, and yields on Turkish government bonds have hit record highs.