Türkiye’s Treasury Faces TL 4 Trillion Domestic Borrowing Need
Lira
Due to rising budget deficits and mounting interest payment obligations, Türkiye’s Treasury is entering a period of intensified domestic borrowing. Over the next 11 months, the Treasury’s domestic borrowing need could reach TL 4.0 trillion, translating to an average of TL 350–360 billion per month, according to projections based on the latest financing programs and fiscal outlook.
May–July: Treasury Targets TL 804 Billion in Domestic Borrowing
In its financing program for May to July 2025, the Treasury will repay TL 733 billion in domestic debt—comprising TL 346 billion in principal and TL 387 billion in interest—as well as an estimated TL 141 billion in foreign debt (converted to lira). To meet these obligations, it plans to borrow TL 804 billion domestically, corresponding to a domestic debt rollover ratio of 110%, with net domestic borrowing projected at TL 457 billion.
For May alone, the Treasury expects TL 161 billion in domestic and TL 29 billion in external repayments, while planning to raise TL 188 billion through six bond auctions—indicating a 117% rollover ratio.
Early 2025 Sees 139% Rollover Ratio, Driven by High Budget Gaps
In the first four months of 2025, the Treasury repaid TL 727 billion in domestic debt but borrowed TL 1.05 trillion, exceeding initial plans by over TL 100 billion. This resulted in a debt rollover ratio of 139%. A key factor is the ballooning budget deficit, with the cash-based budget deficit hitting TL 891 billion and the primary deficit reaching TL 473 billion by March.
External Borrowing Lags Behind Despite Heavy FX Obligations
While the Treasury repaid $9.2 billion in foreign debt in the first four months of the year, it raised just TL 2.5 billion via Eurobond issuance, indicating that some of the foreign debt repayments are being financed through domestic borrowing.
From May 2025 to March 2026, the Treasury is projected to repay around TL 2.7 trillion in domestic debt and $17 billion in external obligations. With many short-term bonds maturing during this period, actual needs may surpass initial estimates.
Borrowing to Exceed TL 4 Trillion as Interest-Free Deficit Persists
Taking into account the expected cash-based primary deficit, analysts forecast the Treasury’s domestic borrowing requirement could reach or exceed TL 4 trillion by March 2026. If realized, this would result in a domestic rollover ratio exceeding 130%, reinforcing the urgency for sustainable fiscal policy measures.
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