The USD to TRY exchange rate has recently shown significant fluctuations, reflecting broader economic factors affecting both currencies. Currently, the USD is at 90-day highs near 42.33, which is 1.7% above its three-month average of 41.61, indicating a stronger performance relative to previous months, where the rate remained stable within a 3.6% range from 40.84 to 42.33.
Analysts note that the recent decline of the US dollar was driven by improving risk appetite among investors, prompted by political developments, including the signing of a funding bill by US President Donald Trump to end a prolonged government shutdown. However, expectations regarding upcoming US economic indicators, particularly the inflation data and potential Federal Reserve decisions, may limit further significant movements in the USD.
On the Turkish side, the lira faces considerable pressure due to rising inflation and central bank policy adjustments. The Turkish Central Bank has recently reaffirmed its inflation target of 16% for 2026 while adjusting its 2025 forecast range upward to 31-33% amid concerns over inflation. This comes alongside a notable interest rate cut to 39.5% as of October, aiming to address escalating inflation risks, which surged unexpectedly to 33.3% in September.
Political unrest in Turkey, marked by protests following the arrest of Istanbul's mayor and opposition members, has contributed to a volatile market environment for the TRY. Such instability led to a sharp lira depreciation following these events, complicating the central bank's efforts to maintain a stable economic outlook.
Given these dynamics, market experts suggest that the long-term trajectory of the USD to TRY exchange rate will be heavily influenced by inflation trends in Turkey and monetary policy responses, as well as developments regarding US economic performance and policy directions. As analysts keep a close eye on these variables, businesses engaged in international transactions may find opportunities and risks that could significantly impact their costs.
