Turkish Lira Sinks Further, Extending Its Losing Streak

2025-10-17 09:19 By Joana Taborda 1 min. read

The Turkish lira extended its losses to a new record low of 41.9 per US dollar in October 2025 and is now down about 18% year-to-date, continuing the pattern of gradual and orderly depreciation that began in July 2023, when President Erdogan appointed a more orthodox economic team.

The central bank has maintained a strong presence in the foreign exchange market to retain tight control over the currency.

At the same time, the government has pursued a policy of so-called “real appreciation,” aiming to ensure that the lira’s nominal depreciation remains slower than consumer inflation.

Annual inflation rate in Turkey accelerated for the first time in fifteen months, reaching 33.29% in September, driven largely by higher food prices amid agricultural frost and drought.

On the monetary policy front, the Central Bank of Turkey surprised markets by cutting its benchmark interest rate by 250 basis points to 40.5% in September, a steeper reduction than expectations for a smaller move to 41%.



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