Turkey's central bank reserves drop $4.3 billion as fund withdrawals hit markets

Data released on Thursday indicate that the Central Bank of the Republic of Turkey’s total reserve assets fell to $174.4 billion for the week ending September 18, down $4.3 billion from the prior week and representing a 2.4 percent decrease. This marks the fourth straight week of reserve erosion, with the total having been $188.2 billion on August 28. Foreign-currency components of the reserves dropped 9.2 percent to $55.1 billion, while gold holdings rose 1.2 percent to $111.6 billion, partially cushioning the overall decline.

The loss coincided with a surge of withdrawals from investment funds that owned shares in companies with limited float, leading some managers to fail to meet redemption requests and prompting broader stock sales that pushed the BIST index down more than 8 percent, its steepest weekly slide since March 2025. The Capital Markets Board (SPK) responded by ordering the liquidation of 131 funds run by seven asset managers, covering assets exceeding $18 billion and affecting 455,758 investors. To address a tightening of lira liquidity, the central bank also expanded its lending to commercial banks.