USD/TRY is the exchange rate between the US dollar and the Turkish lira, one of the world's most volatile currencies. The lira has experienced years of steep depreciation, driven by high inflation and unorthodox monetary policy, including periods of cutting interest rates even as inflation soared. This has made it a cautionary tale of policy credibility and a currency defined by structural weakness.
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Why is US Dollar/Turkish Lira FX Spot Rate (USDTRY.FOREX) moving?
Lira slides to record low as inflation stays high and rate cuts loom
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Structural external gaps keep lira weak Turkey's current-account deficit widened in May and portfolio money is flowing out, not in. With savings too low versus investment, the country needs foreign cash it is not getting, so the lira weakens and USDTRY rises.
Explains the persistent, structural force pushing USDTRY up.
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Banking-sector stress adds to lira vulnerability Commerzbank flagged stress in Turkish banks after Fitch's review, with weaker profits, lower capital ratios and squeezed margins following regulatory changes and past rate cuts. A shaky banking system makes investors more reluctant to hold lira, pushing USDTRY up.
A new risk factor that increases downward pressure on the lira.
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Central bank keeps policy tight, then starts normalizing The CBRT raised its year-end inflation forecast to 28% and held its 37% policy rate, keeping real rates negative but policy tight. It then said it would resume 37% repo auctions, easing funding conditions slightly. Tight policy supports the lira, but the move toward normal funding is a mild negative for TRY.
Shows the main counterweight to lira weakness and its limits.
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Record low and looming rate cuts keep pressure on The lira fell to a record near 48.8 per dollar in September with inflation at 31.5%, and USDTRY broke above 49.0. Commerzbank warns that coming central bank rate cuts in an inflation-prone economy risk further lira weakness.
Captures the latest escalation and the key forward risk for USDTRY.
Q3 2026
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Lira slides to record low as inflation stays high and rate cuts loom
▲
Structural external gaps keep lira weak Turkey's current-account deficit widened in May and portfolio money is flowing out, not in. With savings too low versus investment, the country needs foreign cash it is not getting, so the lira weakens and USDTRY rises.
Explains the persistent, structural force pushing USDTRY up.
▲
Banking-sector stress adds to lira vulnerability Commerzbank flagged stress in Turkish banks after Fitch's review, with weaker profits, lower capital ratios and squeezed margins following regulatory changes and past rate cuts. A shaky banking system makes investors more reluctant to hold lira, pushing USDTRY up.
A new risk factor that increases downward pressure on the lira.
▼
Central bank keeps policy tight, then starts normalizing The CBRT raised its year-end inflation forecast to 28% and held its 37% policy rate, keeping real rates negative but policy tight. It then said it would resume 37% repo auctions, easing funding conditions slightly. Tight policy supports the lira, but the move toward normal funding is a mild negative for TRY.
Shows the main counterweight to lira weakness and its limits.
▲
Record low and looming rate cuts keep pressure on The lira fell to a record near 48.8 per dollar in September with inflation at 31.5%, and USDTRY broke above 49.0. Commerzbank warns that coming central bank rate cuts in an inflation-prone economy risk further lira weakness.
Captures the latest escalation and the key forward risk for USDTRY.
News & notes movingUSDTRY.FOREX
Türkiye
USDTRY.FOREX▲
Commerzbank Warns Lira at Risk as Inflation and Rate Cuts Loom
Commerzbank's Tatha Ghose warns that an easing cycle in an inflation-vulnerable economy is the key risk for the Lira, after USD/TRY broke above 49.0, continuing a pattern of defended levels being breached in step-jumps. Ghose downplays the broader systemic impact of a Turkish stock market scandal and instead highlights surging fuel-driven inflation and the prospect of CBT rate cuts.
Bitcoin Tops ₺3.9 Million as Turkish Lira Slides to Record Low
Bitcoin climbed above ₺3.9 million in Turkey, with BTC/TRY reaching nearly ₺4 million, as the Turkish lira weakened to around 48.8 per US dollar. Bitcoin was trading near ₺3.93 million on Sunday, equivalent to roughly $80,550, and BTC/TRY hit about ₺3.99 million on Sept. 19, according to historical exchange-rate data. CoinMarketCap data showed Bitcoin up approximately 16.6% against the lira over the past 30 days, including a nearly 6% single-day jump on Sept. 18 from around ₺3.73 million to ₺3.94 million, and a roughly 26% rise from near ₺3.1 million on Aug. 19. The lira's slide comes as Turkish Statistical Institute data showed consumer prices rose 31.51% year over year in August, with housing costs up 39.77%, transportation up 35.08%, and food and non-alcoholic beverages up 33.79%. On Sept. 10, the Central Bank of the Republic of Türkiye held its benchmark one-week repo rate at 37%, with the overnight lending rate at 40%, saying underlying inflation was decelerating but warning that elevated energy prices posed renewed upside risks.
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BTC · Monetary · Positive Bitcoin surged to record TRY levels as the lira slid on 31.5% inflation and the CBRT holding rates at 37%, driving demand for BTC as an inflation hedge.
USDTRY.FOREX · Monetary · Positive Turkish lira weakened to a record ~48.8/USD as inflation hit 31.51% and the CBRT held its 37% policy rate, keeping real rates negative.
Turkey's central bank holds policy rate at 37.0% for fifth straight meeting
Turkey's central bank decided at its monetary policy meeting on the 10th to keep its main policy rate unchanged at 37.0%. This marks the fifth consecutive meeting without a change, and was broadly in line with market expectations. The overnight lending rate and borrowing rate were also left unchanged at 40.0% and 35.5% respectively. In a Reuters poll, 16 of 17 economists expected a hold, while one predicted a 100 basis point cut. Economists expect a total of about 200 basis points of rate cuts at the October and December meetings, and it is widely believed that an easing cycle will begin in October. Turkey's August inflation rate stood at 31.51%, and in its latest inflation report the central bank raised its end-2026 inflation forecast to 28% from the previous 26%.
TR-10Y.GB · Monetary · Negative CBRT held rates at 37.0% but economists expect ~200bp of cuts starting October, implying lower yields ahead.
USDTRY.FOREX · Monetary · Negative CBRT held the policy rate at 37.0% for a fifth straight meeting, with an easing cycle expected to start in October, keeping the lira supported near-term.
Commerzbank Sees CBRT Holding 37.0% Repo Rate, Flags Liquidity Tools
Commerzbank's Tatha Ghose expects the Central Bank of the Republic of Türkiye to keep the one-week repo rate at 37.0%, but stresses that effective monetary conditions depend on liquidity tools. The call centers on the CBRT's liquidity stance as the key driver for the Turkish lira, with the headline policy rate held steady at 37.0%. Ghose's view implies that the central bank's use of liquidity instruments, rather than the repo rate alone, will shape actual monetary conditions for the currency.
ING analysts Muhammet Mercan, Frantisek Taborsky, and James Wilson say that normalizing liquidity and a lower effective funding rate have brought market pricing closer to their Central Bank of Turkey rate view for 2026, supporting a gradual repricing of the Turkish lira.
Turkey's central bank to resume 37% repo auctions after Iran war shock eases
Turkey's central bank is preparing to resume weekly repo auctions at the policy rate of 37% to bring funding conditions in the financial system back to normal, after assessing that the most severe economic impact from the war in Iran may have passed. Previously, the central bank suspended funding at the 37% policy rate from early March and switched to a higher overnight lending rate of 40%, effectively a stealth rate hike, to cope with uncertainty after the war erupted in Iran. However, in a statement released on Sunday evening, the central bank did not say when it would resume weekly repo auctions. Fatih Karahan, the central bank governor, said during the presentation of the quarterly inflation report earlier this month that resuming weekly repo auctions was on the central bank's agenda, with the goal of normalizing liquidity conditions rather than signaling monetary easing. Karahan also said at the time that he believed the worst impact of the war had passed. Tugberk Citilci, research director at Fiba Yatirim in Istanbul, said the decision appears to reflect that the central bank has ruled out the possibility of Brent crude oil prices climbing back above $100 per barrel. However, the timing of the central bank's move surprised the market. Turkey is highly dependent on oil and natural gas imports, making its economy highly vulnerable to the surge in global energy prices caused by the war. Volatile energy and food prices have added to domestic inflationary pressures. As a result, the central bank raised its year-end inflation forecast in August to 28% from 26%, bringing it closer to market expectations, while Turkey's annual inflation rate stood at 31.8% in July. The return to weekly repo auctions at the 37% policy rate is therefore seen as an important step in bringing the central bank's funding mechanism back to normal after it had to use a higher overnight rate to cope with war-driven volatility. However, the central bank stressed that the move should not be interpreted as the start of monetary easing amid still-high inflation.
USDTRY.FOREX · Monetary · Positive Central bank resumes 37% repo auctions, easing liquidity and reducing effective rate, likely weakening TRY.
TR-10Y.GB · Monetary · Negative Return to 37% policy rate from 40% effective rate may lower yields, but inflation remains high; direction ambiguous.
ECBRATES.MM · Monetary · Negative Turkey's central bank resuming repo auctions at 37% policy rate signals normalization, potentially reducing need for higher rates, but ECB rates are not directly affected.
Turkey's central bank raises year-end inflation forecast to 28%
Turkey's central bank has raised its forecast for inflation at the end of 2026 to 28%, up from a previous estimate of 26%, amid geopolitical uncertainty from the Iran war and volatility in energy and food prices. Central bank governor Fatih Karahan announced the new projection during a briefing in Istanbul on Thursday, August 13. A central bank survey last month found that markets expected year-end inflation of around 29%, while the central bank kept its inflation target unchanged at 24%. Although inflation slowed for a second consecutive month to 31.8% in July, the central bank continued to signal a tight monetary policy stance. Since the war erupted in late February, the central bank has used the 40% overnight lending rate as its main channel for providing liquidity to the financial system, instead of the 37% benchmark policy rate.
USDTRY.FOREX · Monetary · Negative Central bank raises inflation forecast and signals tight policy, supporting TRY; ambiguity in direction for USD/TRY pair
Commerzbank warns Turkish bank stress heightens lira vulnerability
Commerzbank warns that stress in Turkey's banking sector is increasing the vulnerability of the Turkish lira. Tatha Ghose at Commerzbank flags Fitch’s latest review of Turkish banks as another negative signal for the currency. Profitability has weakened after regulatory changes on FX risk-weighted assets, with capital ratios lower and margins squeezed by prior rate cuts and high costs.
Commerzbank sees dovish corridor risks for Turkish lira
Commerzbank expects the Central Bank of the Republic of Türkiye to leave the 37% repo rate unchanged. Tatha Ghose at Commerzbank said the central bank is operationally signaling readiness to normalise the corridor and re-enable weekly repo once war risks ease.
Turkish Lira under pressure from structural external gaps, Commerzbank says
Commerzbank’s Tatha Ghose highlighted that Turkey’s current-account deficit widened in May and remains structurally driven by savings-investment imbalances. Portfolio inflows are muted, with May showing renewed outflows and signs of capital flight.
