Türkiye’s Debt Capital Market Set to Surpass $500B

Despite global macroeconomic volatility and the impact of rising U.S. tariffs, Türkiye’s debt capital market (DCM) continues its upward trajectory, according to a new report from Fitch Ratings.

Fitch projects that the Turkish DCM could exceed $500 billion in outstanding debt between 2025 and 2026, driven by funding needs, project financing, maturities, Islamic finance expansion, and diversification of funding sources. The agency expects modest growth in 2025, despite political and economic uncertainties.

In April 2025, Turkish DCM issuances reached $12 billion, marking a 60% year-on-year increase and 43% growth compared to the previous quarter. The surge was mainly fueled by sovereign issuances, with 76.5% denominated in Turkish lira, while the remainder was primarily in U.S. dollars.

Foreign Investor Share Declining

Fitch noted a decline in non-resident investor participation. As of end-March 2025, foreign holdings of domestic sovereign debt fell to 8.6%, down from 9.9% at the end of 2024—the highest level seen in four years.

This reduction reflects investor caution in response to global uncertainty and policy changes, particularly those stemming from shifts in international trade dynamics.

Strong Growth in Outstanding Debt

By the end of Q1 2025, Türkiye’s total DCM had reached approximately $465 billion across all currencies, reflecting a 9.8% increase year-on-year. Of that total, 65.9% was in Turkish lira, 31.4% in U.S. dollars, and 2.7% in euros.

While sovereign financing remains the dominant force in the market, banks and corporates are expected to play a larger role going forward, with Fitch highlighting their untapped potential to deepen market participation.

The report reflects cautious optimism that Türkiye’s capital market can continue growing even amid tightening global financial conditions, as long as macroeconomic risks are managed effectively.