Turkey Sells 60 Tonnes of Gold, Does Mr Erdogan Need Cash Again?

Turkey’s central bank, the Türkiye Cumhuriyet Merkez Bankası (TCMB), sold and swapped around 60 tonnes of gold worth more than US$8 billion in the two weeks after the Iran war broke out. Turkey’s gold reserves fell by 6 tonnes in the week ending 13 March 2026 and shrank further by 52.4 tonnes in the week of 20 March. This decline marks a sharp reduction in the country’s reserves. Some gold was sold directly, while the majority was used to obtain foreign currency or lira through swap agreements, according to sources familiar with the transactions. These sales and swaps occurred in the two weeks following the start of the Iran war. The move also added downward pressure on global gold prices. According to Reuters, the value of gold sales last week was around US$3 billion. The TCMB has added US$26 billion in foreign currency sales since the Iran war began nearly a month ago. This reflects efforts by authorities to stabilise the market. Market volatility increased after Israel and the United States attacked Iran on 28 February, accelerating foreign currency sales, which led to a continuous decline in central bank reserves due to a combination of forex sales and falling global gold prices. Separately, bankers estimate that the 10% drop in gold prices last week caused the value of the central bank’s gold reserves to fall by nearly US$8 billion. As a result, the value of gold in the total central bank reserves dropped by around US$18 billion in a week, triggered by gold swaps, sales, and the decline in global gold prices. Gross foreign exchange reserves rose by US$5.8 billion last week. However, total reserves, which combine both, fell by US$12.2 billion to US$177.5 billion. The central bank declined to comment on these figures. Other reports indicate that the central bank plans to utilise its US$135 billion gold reserves to stabilise the Turkish lira since Tuesday (24/3/2026). Turkey aims to access around US$30 billion in gold stored at the Bank of England through a gold-for-cash swap mechanism, thereby avoiding logistical challenges of physically moving the gold. Turkey is facing significant economic pressures, including surging oil prices and high domestic inflation, prompting swift action to protect its currency. Market analysts are closely monitoring funding levels, with potential for further interest rate hikes if the gold swaps fail to stabilise the lira. The lira currency collapsed to its all-time weakest level on Friday (27/3/2026). This situation forces the country led by Recep Tayyip Erdoğan to find ways to save its economy. With the exchange rate plummeting to its lowest level and pressure from the Iran conflict burdening the economy, the central bank is moving beyond mere interest rate hikes to strengthen the domestic currency. A US$135 Billion Safety Net Amid Global Turmoil Turkey’s gold reserves have long been a source of national pride and a buffer to reduce dependence on the US dollar. With foreign exchange reserves under pressure at only US$47.8 billion compared to US$134.1 billion in gold, the decision to optimise gold holdings is increasingly logical. According to World Gold Council data, Turkey’s central bank has been one of the most active in accumulating gold since 2022. In 2024, for example, Turkey bought 75 tonnes of gold. That is why this selling action is noteworthy, as Turkey is finally using its reserves as a “lifeline card”.