Turkey spent approximately $12 billion in foreign currency reserves in a single week to prevent the lira from collapsing, according to Bloomberg and other financial outlets reporting on March 6, 2026. The move was a direct response to the outbreak of military conflict between the United States, Israel, and Iran, which triggered panic across emerging markets when global trading opened on Monday, March 2. The $12 billion figure represents roughly 15 percent of Turkey's net foreign currency reserves excluding swaps.
The intervention was carried out through the back door. Rather than acting directly, the central bank (CBRT) used state-owned lenders to sell dollars into the market to meet surging demand. The sales were heaviest on Monday and Tuesday, tapering off by Thursday as conditions began to stabilise. Alongside the dollar sales, the CBRT suspended its weekly repo auctions to tighten lira liquidity and make it more expensive to short the currency. New lira-settled forward foreign exchange instruments were also introduced to curb speculative demand. The Capital Markets Board (SPK) separately imposed a one-week ban on short selling across Borsa Istanbul after the main index fell 3.8 percent and the banking index dropped 6.5 percent.
Why Turkey Is Vulnerable
Turkey is a major energy importer with no significant domestic oil or gas production. The 16 percent jump in crude prices that followed the outbreak of the conflict directly threatened the country's inflation targets and widened its current account deficit. Turkey also shares a border with Iran, adding geographic risk on top of the financial pressure. The lira has historically been one of the most sensitive emerging market currencies to global risk-off episodes, and without intervention, analysts warned of a self-reinforcing depreciation spiral.
The intervention held. The lira declined only 0.1 percent during the crisis week, making it the best-performing emerging market currency over the period. Turkey entered the crisis with approximately $78.4 billion in net reserves, including gold, a stronger position than in previous stress episodes. However, analysts at Goldman Sachs and Commerzbank have noted that while the central bank has the firepower to absorb short-term shocks, spending $12 billion in five days is not sustainable if the conflict drags on. A prolonged war would likely force more drastic measures, including aggressive interest rate hikes or capital controls. For now, the lira held. Whether it continues to hold will depend on how the conflict develops.
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GÖNÜLTAŞ, Mehmet（Reporter）
Freelance journalist based in Istanbul, Turkey. He writes on international relations and diplomacy, with a focus on Japan–Turkey relations, military affairs, and democratic governance. His hobbies are running, language study, and traveling.
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