2025.10.1709:19:50UTC+00Turkish Lira Sinks Further, Extending Its Losing Streak

In October 2025, the Turkish lira plummeted to a record low of 41.9 against the US dollar, marking an 18% decline for the year. This steady depreciation began in July 2023 when President Erdogan introduced a more traditional economic team. To manage the currency's performance, the central bank has been actively intervening in the foreign exchange market. Concurrently, the government has implemented a policy of "real appreciation," striving to ensure that the currency's nominal decline is slower than the rate of consumer inflation. In September, Turkey's annual inflation surged to 33.29%, marking the first rise in fifteen months due largely to increased food prices resulting from agricultural frost and drought. In terms of monetary policy, the Central Bank of Turkey unexpectedly lowered its benchmark interest rate by 250 basis points to 40.5% in September, defying predictions of a minor cut to 41%.