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TALAYINSIGHT
RegionTürkiye and Its Neighbourhood

MediumIV Macro Policy & Sovereign Debt8 October 2026, Thursday

Foreign holdings in Turkish investment funds more than halve in September

Central Registry Agency (MKK) data show foreign investors' holdings in Turkish investment funds fell from 11.1 billion dollars at the end of August to 5 billion dollars at the end of September. A calculation released the same day shows foreigners' lira derivative positions with Turkish banks also fell 2.5 billion dollars in the week to 2 October.

Location: ISTANBUL

Dünya reported on 8 October that the 6.1 billion dollar fall amounts to about 55%. Total fund assets fell over the same period from about 11 trillion lira to 9.5 trillion lira, or from 228.2 billion dollars to 194.4 billion dollars. The number of foreign investors fell from 57,417 to 57,044, a drop of only 373. The gap between a 55% loss in value and a 0.65% fall in numbers suggests the losses are concentrated in a few large accounts.

Dünya notes that the monthly total does not separate net outflows from valuation losses. Nor does it show how much is linked to the SPK placing 131 funds into liquidation on 17 September. Yatırımx reports the same MKK figures, and neither source gives a breakdown by fund type. Treating the full 6.1 billion dollars as foreign outflows therefore cannot be verified.

Carry trades are also unwinding. A Bloomberg HT calculation based on BDDK and CBRT data shows foreigners' lira derivative positions with Turkish banks fell 2.5 billion dollars in the week to 2 October, to 56.6 billion dollars. That is the lowest level since mid-July. Positions hit a record 65.3 billion dollars in mid-August; the total decline since the end of August is 8.7 billion dollars.

Talay assessment

Bottom line

Both data sets point the same way: foreigners are cutting their exposure to lira assets through both funds and derivatives. How much of the 6.1 billion dollar fall in fund holdings reflects outflows, and how much valuation and liquidation effects, is unclear. The 8.7 billion dollar drop in lira derivative positions, by contrast, shows carry trades unwinding directly, consistent with the pressure on reserves.

Likely effects

  • FX demandNegativeWeeks

    Unwinding lira derivative positions creates FX demand at maturity; if the market does not meet it, it comes out of CBRT reserves.

  • Fund industryNegative1–6 months

    A 33.8 billion dollar fall in total fund assets in dollar terms shows the fund crisis is not confined to domestic investors.

  • Reading the dataUncertainWeeks

    A drop of only 373 investors suggests the losses are concentrated in a few large accounts; until a breakdown arrives, a general exodus cannot be inferred.

Possibilities, ranked

  1. 1
    Gradual unwinding continues55%

    Lira derivative positions keep falling by 1–2.5 billion dollars a week until the MPC meeting, and reserve erosion continues.

    Watch: Bloomberg HT's weekly lira derivatives calculation and reserve data on 15 October

  2. 2
    Stabilisation30%

    Derivative positions settle around 55 billion dollars and foreign fund holdings hold steady in October MKK data.

    Watch: October MKK foreign fund holdings data due in early November

  3. 3
    Accelerating exit15%

    Positions fall below 50 billion dollars and pressure on the currency becomes pronounced.

    Watch: Lira derivative positions falling by more than 4 billion dollars in a single week

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

  • Foreign fund holdings (Sept)▼ −$6.1bn
  • Lira derivatives (wk to 2 Oct)▼ −$2.5bn
  • Total fund assets ($)▼ −$33.8bn

Sources

  1. Dünya — Foreign fund holdings shrink by 6.1 billion dollars in a month
  2. Yatırımx — MKK data show foreigners pulled 6.1 billion dollars from funds
  3. Bloomberg HT — Foreigners' derivative positions with Turkish banks fall by 2.5 billion dollars