CEEMEA Blog: Türkiye: flows & reserve tracker: carry in the driving seat

Research evidence excerpt

CEEMEA Blog: Türkiye: flows & reserve tracker: carry in the driving seat

Deutsche Bank

Research

Emerging Europe Strategy Date

Turkiye 2 July 2026

CEEMEA Blog

Türkiye: flows & reserve tracker: carry in

the driving seat

Yigit Onay

Overview Economist

Following the introduction of our Türkiye flows and reserve tracker in May -2025, we +44-20-75410227

continue to provide our updates and expectations for the near term.

Foreign inflows strengthened further into H2-June after an already constructive

start to the month, supported by expectations that domestic political risks would

remain contained in the near term, easing C/A concerns on the back of lower energy

prices, and continued confidence in the carry story. Notably, the hawkish tone

following the June Fed meeting had little visible impact on positioning. The

strongest weekly carry inflow of the year was recorded in the week of June 19 at

USD 10.8bn, including USD 7.2bn in FX derivatives and USD 3.5bn in repo/depo/

loans transactions. While around USD 2.4bn was subsequently unwound last

week, cumulative inflows over the last two weeks still reached roughly USD 8.4bn,

lifting estimated carry exposure to USD 44.8bn, standing above the peak seen

before the conflict. The recovery in flows indicates that investors have largely rebuilt

carry exposure following the conflict-related retrenchment, with positioning now

exceeding pre-war highs. In contrast, re-engagement in local bonds and equities

remains more limited, with net inflows of USD 0.8bn and USD 0.7bn, respectively,

over the same period. Foreign ownership of local government bonds stands at 6.5%

(USD 15.6bn), still well below the 10% (USD22bn) peak seen before the conflict,

suggesting investors continue to favour carry trades over longer-term allocation