Türkiye will raise interest rate and sell U.S. Treasury bonds to defend Turkish Lira, US Iran war, Ukraine War or Energy Crisis

Recent reports indicate that Türkiye has suffered a significant loss in market capitalization across its stock market and currency (the Turkish Lira); consequently, the Turkish government is set to take measures to restore stability to the lira and Turkish stocks. Türkiye To defend its markets,Currency and lower the inflation from liquidity crisis, Türkiye is liquidating troubled investment funds, freezing risky portfolios, and injecting emergency liquidity into the financial system. Türkiye’s economic authorities have launched an aggressive, multi-pronged intervention to stabilize the Turkish lira and the Borsa Istanbul following a severe liquidity crisis in the portfolio management sector. Faced with structural risks and panic selling, regulators are moving beyond standard monetary policy to enforce rigorous legal, financial, and structural guardrails.

Why Türkiye holds Swiss Franc(CHF), British Pound (GBP), US Dollar (USD) European Union (EUR) and Japanese Yen (JPY) in their foreign currency reserve?

Recent reports indicate that Turkey is the only country facing a major liquidation crisis due to its substantial multi-currency holdings—specifically in EUR, USD, GBP, Japanese Yen, and Swiss Francs (CHF). Consequently, factors such as stock market volatility, crude oil dynamics, and geopolitical instability are forcing a continuous sell-off of the Turkish Lira and its stocks.

Türkiye holds various currencies from multiple countries—a practice largely facilitated by its geography, as it maintains bilateral relations with nearly every nation in the world and does not rely solely on the Dollar or GBP to drive its economy, trade, and financial sectors.

Turkey is well aware that its relations with various nations often deteriorate—complicating matters related to regional military conflicts, financial issues, defense deals, and business dealings with foreign firms—because it refuses to compromise its sovereignty or alter its foreign reserve strategy under pressure from any country, even at the cost of damage to its currency and stock markets.

When a central bank wants to stop its currency from crashing, it sells highly liquid foreign assets (like US Treasuries) to buy US dollars, which it then uses to buy back its own currency on the open market.

Why U.S. Sanctions or Tariff war or assets freeze not impact Turkish business or trade?

Turkey is aware that approximately 90% of the world’s nations primarily use the USD or EUR for international business. However, given the way Turkey is developing its defense, economic, and trade sectors—developments that may or may not be viewed favorably by the US or other nations—it maintains reserves in the currencies of various leading countries. This strategy ensures that no single nation can freeze its assets through sanctions, tariffs, trade restrictions, or conflict. In most instances, Turkey utilizes foreign assets, currencies, US Treasury bonds, and gold to defend its stock market and the Lira; while foreign investment in the country has steadily increased in recent years—partly due to the Russia-Ukraine war—Turkey has also faced significant challenges. As a NATO member that is not part of the European Union, it must always make its decisions with careful deliberation.

Why Still Turkey expanding its Military, Trades, Economic or foreign interest in the world?

Turkey frequently faces US sanctions and tariffs—stemming from its trade dealings with Russia, Europe, and the US—largely due to its involvement in controversial matters such as the F-35 and S-400 deals, as well as the development of its own drones and missiles. Turkey still purchases approximately 46% of its oil from Russia—a move viewed quite negatively by the US and European nations—yet it continues to strengthen its national standing, foreign assets, and military interests in regions and countries such as Syria, Somalia, Sudan, Libya, Ukraine, Iran, and the Middle East. Turkey is by no means an ordinary country; it is a highly interesting nation with a strong strategic location, robust military and defense industries, and significant influence within NATO and Europe, all while maintaining a relatively low foreign debt of around $500 billion.

Türkiye has invested in new projects across sectors such as tourism, defense, Construction, Military spendings, European politics, foreign interests, outward foreign investment, and finance. However, to this day, Türkiye has not yielded to pressure from any country—a common occurrence for nations across the Middle East, Europe, and Africa, as well as South Asia. Along with Russia, Iran is also maintaining its relationship as Turkey’s second-largest pipeline gas supplier (accounting for around 17%).

On the other hand, Turkey has made outward investment exceeding $150 billion in abroad countries, including the Netherlands, Jersey, the United Kingdom, the United States, and Russia. At the same time, Türkiye has consolidated its interests regarding Hamas, Hezbollah, the Houthis, HTS, Al-Qaeda, Iran’s IRGC, and Syria, as well as Iraq; although the manner in which Israel attacked Syria stemmed from a different set of reasons.