Turkish Lira Extends Controlled Weakening

2025-10-03 10:51 By Andre Joaquim 1 min. read

The Turkish lira maintained its gradual weakening trend to a record low of 41.8 per USD in October, despite the weaker momentum for the US dollar, as the Turkish central bank continued to intervene in foreign exchange markets to control Turkey's demand for hard currency.

The central bank cut its reference rate by 250bps last month to 40.5%, extending its easing cycle since peaking at 50% to late 2024.

Policymaker opted to continue easing policy despite the foreign exchange pressures, as the selling of hard-currency reserves and series of capital controls to prevent lira selloffs were enough control the currency's depreciation.

Triggers on the currency were also avoided as Turkey's court postponed a ruing on the leadership of the main opposition Republican People’s Party.

Meanwhile, inflation rose for the first time in one year in September, inching higher to 33.3%, halting the country's disinflation momentum to favor higher rates by the TCMB.



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