Commerzbank said the Turkish lira is close to its quarter-end target of **44.0 USD/TRY**. It linked the move to **higher inflation expectations**, a **weaker external balance**, and **falling reserves**.
Turkey’s central bank monthly survey showed that market expectations for **end-2026 inflation** rose by about **1 percentage point**, from **23.2%** to **24.1%**. The figures also include an **end-2027 inflation** forecast of **17%**.
Balance of payments data for December showed a **wider**, seasonally adjusted **current-account deficit**. The report also said **capital inflows** have weakened.
The bank said these factors suggest the lira will keep **depreciating** against the US dollar. It also noted that the exchange rate has repeatedly **broken through new levels**.
The Turkish lira is under steady pressure and is being pushed toward **44.0 per US dollar**. This reflects doubts about Turkey’s economic rebalancing, especially as inflation expectations keep rising. The latest official data from January shows annual inflation is still high at **69.5%**, which suggests price pressures are not yet under control.
With the market’s **end-of-year inflation** forecast now at **24.1%**, investors appear to expect little real improvement. This pessimism, also seen in shifts in sentiment during 2025, makes **long USD/TRY** positions look attractive. Traders may consider **USD/TRY call options** with strike prices above the current spot rate to benefit if the lira continues to weaken.
The balance of payments picture is also negative. The seasonally adjusted current-account deficit is widening again, and capital inflows are drying up. In similar periods in 2024 and 2025, these trends often came before sharp moves. The central bank’s net reserves have reportedly fallen by **$4.8 billion** in the past month. This supports positioning for further lira weakness, including through **longer-dated USD/TRY futures** that match a gradual depreciation trend.
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