The USD to TRY exchange rate has recently shown significant movement, reaching 90-day highs near 42.35, which is 1.7% above its three-month average of 41.66. The trading range over the last months has been notably stable, varying only 3.5% between 40.93 and 42.35.
The current strength of the US dollar is attributed to nervous investor sentiment favoring safe-haven currencies amid global uncertainties. Recent minutes from the Federal Reserve’s policy meeting reinforced a hawkish stance, leading to expectations that any signs of economic weakness, such as disappointing payroll figures, could influence Fed rate decisions in the near future. Analysts are closely watching upcoming inflation data which is poised to further drive USD valuations.
On the Turkish side, the central bank’s strategy remains focused on controlling inflation, recently reaffirming a 2026 year-end target at 16% while adjusting the 2025 forecast range significantly higher, from 25-29% to 31-33%. This move signals the central bank's readiness to tighten monetary policy if inflation deviates from targets. Amid increasing inflation—which unexpectedly surged to 33.29% in September—Turkey's central bank recently opted for a more cautious approach by reducing interest rates only slightly, indicating a delicate balancing act amid rising price levels.
Political unrest has compounded the pressure on the Turkish lira, exacerbating market volatility. The arrest of political figures led to a sharp depreciation of the lira, underscoring the currency's sensitivity to domestic political events. With a backdrop of global dedollarization efforts and potential impacts from US-China trade negotiations, the USD's recent performance and the TRY's challenges could lead to continued fluctuations in the exchange rate.
Market observers suggest that businesses and individuals involved in international transactions should remain vigilant. The interplay of US monetary policy and Turkey's inflationary pressures will likely continue to influence the USD to TRY exchange rate in the forthcoming weeks.
