Economy in Turkey: ING Releases New Dollar to Turkish Lira Forecast

ING Expects Carry Trade Interest to Continue

ING Global noted that carry traders remain interested in the Turkish lira and are preparing to maintain this trend for at least another month. According to the bank, the Central Bank of Turkey has not signaled any change in its macroprudential framework, while emphasizing that interest rate cuts will continue in line with the inflation outlook.

Policy Rate and Inflation Outlook

If 250 basis point cuts continue, ING forecasts that the year-end policy rate will drop to 35.5 percent. If the pace slows to 200 basis points, the rate is expected to settle at 36.5 percent. The report also highlights ongoing concerns over dollarization, foreign reserves, and the potential market volatility surrounding upcoming court hearings.

Turkish Lira’s Real Value Gains

ING underlined that the Central Bank views the lira’s real appreciation as a natural outcome of tight monetary policy, adding that this strengthens demand for the currency. However, while consistent short-term gains month by month or quarter by quarter may not always be observed, the lira is still expected to achieve cumulative real appreciation over the long term.

Dollar to Turkish Lira Forecast for the Next Year

ING Global projects a gradual weakening of the Turkish lira against the dollar over the next 12 months. The short and medium-term forecasts show steady increases: 42.00 in one month, 44.00 in three months, 46.70 in six months, and 50.80 in twelve months.

The short-term trend is described as a “mild rise,” indicating that although the depreciation is not aggressive, the lira is expected to continue losing nominal value.

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