Iris Cibre Unveils Costly Midnight Move Behind Turkey’s $1.3B FX Reserve Drop

Renowned financial analyst İris Cibre has revealed critical insights into a $1.3 billion decline in the Central Bank of Turkey’s (CBRT) net foreign exchange position—excluding swap deals—exposing what she describes as a “costly midnight error.”

On July 29, 2025, Cibre shared a detailed breakdown via social media, stating that the CBRT’s net reserves dropped to $34.6 billion, with $900 million sold in a single day—Friday. The cause? A misfired swap operation intended to profit from weekend interest rates.

The Setup: A Swap for Profit Turns Sour

According to Cibre, the CBRT attempted a routine financial maneuver on Thursday, July 25, which backfired due to an unexpected spike in the USD/TRY exchange rate just seconds before midnight.

Here’s how it unfolded:

• The Plan: A common market tactic involves selling dollars before the weekend to earn 3-day swap interest, then buying back the dollars at a lower rate once the market calms.

• The Spike: Just before midnight, the USD/TRY exchange rate suddenly surged to 40.89.

• Liquidity Vanished: Cibre attributes this jump to a lack of liquidity, stating that “quotes were left empty”, meaning there were no available buyers or sellers to stabilize the rate.

• The Outcome: The Central Bank was forced to repurchase dollars at a much higher price, turning a potentially profitable swap operation into a loss.

“Even the 3-day swap gain evaporated,” Cibre summarized.

What the Reserve Graph Tells Us

The accompanying chart Cibre posted paints a broader picture of CBRT reserve volatility in 2025:

• Early 2025: Reserves rose sharply, surpassing $60 billion.

• Spring Plunge: A steep drop followed, with levels bottoming near $10 billion.

• Gradual Recovery: Since May, reserves have shown a gradual rebound, though the latest data suggests this trend has hit a minor setback.

This episode illustrates how liquidity gaps, improper timing, and unexpected currency volatility can undo even well-planned financial strategies at the central banking level.