Turkey dumped $36 billion in gold and FX reserves this year trying to prop up the Lira.
Spoiler: didn't work.
The currency still looks like it's in free fall. Classic case of fighting gravity with a checkbook — you can burn through reserves fast, but if the underlying macro is broken (inflation, policy credibility, capital flight), you're just delaying the inevitable.
This is what happens when you try to defend an exchange rate without fixing the fundamentals. You bleed reserves, lose market confidence, and end up worse off than if you'd just let it adjust earlier.
For context: $36B is massive for an emerging market central bank. That's not FX intervention — that's panic mode. And when the chart still looks like that after burning through that much firepower, it tells you the market doesn't believe the story anymore.
Lesson: you can't print credibility. And trying to defend a currency with reserves alone is like trying to hold back a flood with sandbags when the dam's already cracked.
Spoiler: didn't work.
The currency still looks like it's in free fall. Classic case of fighting gravity with a checkbook — you can burn through reserves fast, but if the underlying macro is broken (inflation, policy credibility, capital flight), you're just delaying the inevitable.
This is what happens when you try to defend an exchange rate without fixing the fundamentals. You bleed reserves, lose market confidence, and end up worse off than if you'd just let it adjust earlier.
For context: $36B is massive for an emerging market central bank. That's not FX intervention — that's panic mode. And when the chart still looks like that after burning through that much firepower, it tells you the market doesn't believe the story anymore.
Lesson: you can't print credibility. And trying to defend a currency with reserves alone is like trying to hold back a flood with sandbags when the dam's already cracked.
