The Turkish lira neared 50 per US dollar in October 2026, setting a new record low as authorities continued to manage a gradual depreciation while intervening in the foreign exchange market to prevent a steeper drop. The currency remains vulnerable to carry-trade strategies, with investors borrowing in lower-yielding currencies to purchase higher-yielding Turkish assets.
At its October meeting, the Central Bank of Turkey cut its benchmark interest rate by 100 basis points to 36%, in line with expectations, marking its first rate reduction since the onset of the war with Iran. The move came after another moderation in inflation, which slowed to 29.73% in September—its lowest level in nearly five years. The easing cycle is projected to continue into 2027, with the policy rate expected to decline to 28% by year-end.
At the same time, the investment fund sector is experiencing a crisis following a regulatory decision to liquidate 131 funds.
