The recent exchange rate forecasts for the Turkish Lira (TRY) against the US dollar (USD) reflect a complex interplay of political, economic, and monetary policy factors. As of now, the TRY trades at 0.023344, which is approximately 1.5% below its three-month average of 0.023688, indicating some stability within a narrow range from 0.023309 to 0.024069.
The USD has come under pressure due to a soft Consumer Price Index (CPI) report, which showed inflation dropping from 3% to 2.7% in November. Analysts note that this decline has heightened expectations for additional rate cuts from the Federal Reserve in 2026, with potential loosening of monetary policy beginning as early as mid-2026. The anticipated dovish stance from the Fed is likely to exert further downward pressure on the USD, given that a reduction in interest rates typically narrows the yield differential that supports the dollar.
On the other hand, the Turkish Lira faces challenges stemming from ongoing political instability and economic pressures. Recent protests following the arrest of Istanbul's Mayor have contributed to a depreciation of the lira. Additionally, the Central Bank of the Republic of Turkey (CBRT) continues to implement aggressive interest rate cuts to stimulate the economy, despite domestic inflation soaring to 33.29% as of September 2025, driven by high food prices and supply disruptions.
Analysts emphasize the impact of these factors on the TRY's volatility. Currency interventions by the CBRT to stabilize the lira in response to market turbulence are indicative of ongoing efforts to manage the currency's trajectory amid political and monetary uncertainties.
Combined, the current outlook suggests that while the USD may see weakening trends due to expectations of Fed rate cuts, the TRY's performance remains susceptible to internal political unrest and inflationary pressures. As a result, stakeholders involved in international transactions should remain vigilant, as fluctuations in this currency pair could lead to opportunities or heightened costs.
