Turkish Lira Above 42.6

USDTRY increased to an all-time high of 42.57.

Over the past 4 weeks, US Dollar Turkish Lira gained 0.78%, and in the last 12 months, it increased 22.28%.

The Turkish lira hit a new record low above 42.4 per US dollar in December, extending its year-to-date decline to around 20%.

The currency’s gradual and managed depreciation, ongoing since July 2023, has persisted amid renewed concerns about the country’s political outlook, which continue to weigh on investor sentiment.

In early November, Finance Minister Mehmet Simsek argued that worries about the lira are “no longer based on fundamentals,” citing a sharp reduction in the current account deficit, improved access to international capital markets, and stronger financial indicators.

Inflation in Turkey eased more than expected to 32.87% in October, the lowest rate since November 2021.

The central bank raised its end-2025 inflation forecast to 31%–33% from 25%–29%, while keeping its 2026 projection at 16%.

The monetary authority has already cut interest rates three times in a row, totaling 650 basis points.

Meanwhile, the Turkish economy grew 3.7% in Q3, slowing more than expected.

The Turkish central bank could continue to cut interest rates despite elevated inflation, adding further pressure on the lira, Commerzbank's Tatha Ghose says in a note. The central bank on Friday raised its year-end forecast again to a range of 31% to 33%. However, Governor Fatih Karahan said the broader disinflation trend was expected to persist. "We are skeptical of this claim," Ghose says. The prospect of continued premature rate cuts despite rising inflation risks reduces the attractiveness of the lira in so-called carry trades, where investors borrow in currencies with low interest rates to invest in higher-yielding ones, he says. The dollar rises 0.1% to 42.2259 lira, having reached a record high of 42.2416 Friday, LSEG data show. (renae.dyer@wsj.com)

USDTRY increased to an all-time high of 42.19.

Over the past 4 weeks, US Dollar Turkish Lira gained 1.64%, and in the last 12 months, it increased 22.74%.

The Turkish lira hit a new record low of 41.9 per US dollar in October 2025, extending its year-to-date decline to around 18%.

The currency’s gradual and managed depreciation has persisted since July 2023, when President Erdogan appointed a more orthodox economic team.

The Central Bank of Turkey has maintained a firm presence in the foreign exchange market to keep tight control over the lira’s movement and the government continues to pursue a policy of so-called “real appreciation”.

On the monetary policy front, the central bank cut rates by 100bps in October, in line with expectations.

This marked the third consecutive rate cut, though the smallest in the current easing cycle, as inflation accelerated for the first time in fifteen months, reaching 33.29% in September.

Separately, a Turkish court ruling on the leadership dispute within the main opposition CHP, scheduled for October 24, poses a potential source of renewed volatility in the country’s markets.

The Turkish lira holds steady versus the dollar after Turkey's central bank cut interest rates by a further 100 basis points to 39.5%, as largely anticipated. It marks a slower pace of policy easing after last month's 250 basis points cut. The decision comes after higher-than-expected inflation data for September. The central bank said "while recent data suggest that demand conditions are at disinflationary levels, they also point to a slowdown in the disinflation process." President Recep Tayyip Erdogan has repeatedly called for rate cuts even as inflation remains elevated. The U.S. dollar trades flat at 41.9797 lira, little changed after the decision. It hit a record high of 41.9948 lira on Wednesday. (renae.dyer@wsj.com)