Mysterious $6.5 billion outflow from Turkey before US-Iran war

According to data published by the Central Bank of the Republic of Turkey (CBRT), the current account deficit was $7 billion 501 million in February 2026. As reported by Sözcü, the annualized current account deficit reached $35.4 billion. During the same period, changes in reserves and capital movements stood out due to the impact of regional tensions.

GEOPOLITICAL DEVELOPMENTS PUSHED RESERVES DOWN

The rising US-Israel-Iran tension in the Middle East in February increased the demand for safe havens in global markets. While capital outflows from Turkey drew attention during this process, the activity in the financial account revealed a change in investor behavior.

A decrease of $10 billion 630 million was recorded in official reserves in February. This decline was associated with steps taken to maintain market stability in the face of increasing geopolitical risks.

HIGH TREND IN FOREIGN TRADE DEFICIT

The foreign trade deficit, defined by the balance of payments, was $7 billion 478 million in February. According to the last 12 months of data, the foreign trade deficit reached $73.2 billion.

The services balance continued to be the item limiting the current account deficit. In the services balance, which gave a surplus of $62.6 billion on an annual basis, the prominent items for February were as follows:

• Travel revenues: $1 billion 841 million
• Transportation revenues: $1 billion 215 million

NOTABLE MOVEMENTS ON THE FINANCING SIDE

Portfolio investments recorded a net inflow of $780 million in February. However, the fluctuation in sub-items pointed to a weakening in risk appetite.

The main items for the same period are simplified as follows:

• Current account: $7 billion 501 million deficit
• Foreign trade balance: $7 billion 478 million deficit
• Official reserves (net change): $10 billion 630 million decrease
• Net errors and omissions: $6 billion 471 million outflow

While a net outflow of $138 million was seen in direct investments, real estate purchases by non-residents in Turkey amounted to $230 million. The approximately $6.5 billion outflow in the net errors and omissions item during the pre-war period became one of the prominent headlines on the financing side.

WHAT DOES THE NET ERRORS AND OMISSIONS ITEM MEAN?

Net Errors and Omissions (NEO) is defined as a correction item used in balance of payments statistics. Discrepancies between different data sources are balanced in this item.

The main factors affecting this item are listed as follows:

• Time differences between customs and bank records
• Differences in tourism revenues between surveys and records
• Off-system cash and precious metal movements
• Some transportation and service revenues not fully reflected in the records
• Expectations for the upcoming period

Analysts point out that the February data covers a period when regional tension had not yet turned into hot conflict. The effects of the war are expected to be felt more clearly in March and April.

The fact that the current account balance excluding energy and gold gave a deficit of $1.4 billion shows that external dependency continues, while the decline in reserves indicates that the impact of geopolitical developments on financial vulnerabilities may continue.