The Real Value of the Turkish Lira Reaches 3.5-Year High

The real exchange rate index of the Turkish Lira increased by 1.5% in July, reaching its highest level in the past 3.5 years. According to data published by the Central Bank of the Republic of Turkey (CBRT), the real effective exchange rate index based on the Consumer Price Index (CPI) was calculated as 62.90 points in July. This is the highest level since March 2021, when it was 64.99 points.

The CPI-based real exchange rate index was revised from 61.90 points to 61.99 points for June.

The Producer Price Index (PPI)-based real effective exchange rate increased by 0.3%

The PPI-based real effective exchange rate index increased by 0.3% to 94.69 points in July. The previous month’s index was revised from 94.30 points to 94.40 points.

The real effective index based on developing countries rose from 50.02 points to 50.79 points, while the index based on developed countries increased from 71.54 points to 72.54 points.

The nominal effective exchange rate is calculated as the weighted average value of the Turkish Lira (TL) based on a basket of currencies from countries that have a significant share in Turkey’s foreign trade.

The increase in the real effective exchange rate indicates that the Turkish Lira has appreciated, meaning that the prices of Turkish goods in terms of foreign goods have increased.