The USD to TRY exchange rate has recently reached 90-day highs near 41.15, which is 2.5% above its 3-month average of 40.14. This movement reflects the currency's stability within a 5.2% range from 39.11 to 41.15, indicating heightened market sensitivity towards both domestic and international developments.
Analysts suggest that the US dollar has been buoyed by a risk-averse environment due to market concerns, particularly following the increase in US tariffs on Indian goods. Additionally, economic indicators such as the second estimate for US GDP growth and jobless claims are anticipated to further influence the dollar's strength, especially if they deviate from expectations. Experts are closely monitoring the upcoming inflation data, with predictions of a 0.3% rise in core prices potentially impacting Federal Reserve decisions regarding interest rate adjustments.
On the Turkish side, the impending phasing out of the FX-protected deposit scheme poses significant challenges for the lira. This scheme, which has been a financial cushion for depositors, has cost the government $60 billion and is set for complete termination by the end of 2025. Moreover, the central bank's recent interest rate cut of 300 basis points to 43% marks a significant shift, aimed at stabilizing the economy amid ongoing political unrest and economic instability.
Recent data reveals that growth projections for Turkey have been revised downward, with analysts forecasting GDP growth at only 2.8%, well below the government's target of 4%. This situation is compounded by political tensions and the economic fallout from the arrest of opposition leader Ekrem İmamoğlu, which has led to protests and additional investor uncertainty.
The combined effect of these factors is expected to continue influencing the exchange rate between the USD and TRY, with economists and market analysts closely watching how adjustments to US economic policies and Turkey's internal challenges will unfold in the coming weeks.
