The Central Bank of Turkey sold and swapped approximately 60 tons of gold, worth over $8 billion, in just two weeks following the outbreak of the war related to Iran. This move increased downward pressure on gold prices worldwide.

These operations aim to support the stability of the Turkish lira, which faces renewed pressures due to geopolitical tensions and rising energy costs.

Central Bank data showed a sharp decline in gold reserves, which decreased by 6 tons in the week ending March 13, followed by an additional loss of 52.4 tons in the following week, bringing the total decrease to 58.4 tons over two weeks.

Sales and swaps to support the currency

According to informed sources cited by Bloomberg, part of the gold was sold directly, while the majority was used in swaps to obtain foreign currencies or Turkish lira, aiming to boost liquidity and support the foreign exchange market.

These moves were made swiftly after the war broke out and contributed to increased pressure on precious metal prices, amid large amounts of gold flooding into markets.

Rising economic pressures

Turkey faces direct repercussions of the conflict due to its heavy reliance on energy imports, especially oil and gas from Iran. With inflation reaching 31.5% in February, authorities tried to maintain the real strength of the lira to curb price increases.

However, this strategy has become more costly, as reserves decline and import bills rise.

In this context, policymakers tightened liquidity and increased financing costs, along with relying on state banks to support the currency. A previous Bloomberg report indicated that the Central Bank sold foreign assets worth about $16 billion in recent weeks, including US Treasury bonds.

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