Turkey’s exports in December reached $22.5 billion, slightly down from $22.7 billion in November. This small drop indicates a steady yet cautious economic outlook for Turkey’s exports as the new year begins. Global market conditions, changing demand, and trade policies may be influencing these results. As Turkey navigates its economic landscape, it will likely concentrate on strategies to enhance export growth and competitiveness in international markets.

Importance of Trade Profile

The latest figures highlight the importance of maintaining a strong trade profile for economic stability and growth. Monitoring trends in the coming months will be essential for understanding Turkey’s export dynamics and overall economic health. The slight decline in exports—from $22.7 billion to $22.5 billion—suggests that the economic stabilization observed in 2025 may be slowing down. This signals that the Turkish Lira (TRY) could come under renewed pressure in the upcoming weeks. We might face challenges to the improving current account balance that was prominent in the latter half of last year. The economic backdrop remains tough, with annual inflation ending 2025 still high at 68.4%. The Central Bank’s aggressive interest rate hikes in 2025 aimed to control this, but falling export revenues could complicate their efforts. This conflict between strict monetary policy and a weakening trade balance can lead to currency volatility.

Currency and Equity Strategies

With the USD/TRY exchange rate around 38.50, we should consider buying out-of-the-money call options. For example, February or March expiry calls with a 40.00 strike price provide a cost-effective way to prepare for Lira depreciation. This approach offers potential gains if export weakness continues to impact the currency, while keeping the downside limited to the premium paid. On the equity front, this data poses challenges for the BIST 100 index, which relies heavily on industrial exporters. We might look at buying protective put options on XU100 futures to safeguard any long equity positions. A bearish outlook can be expressed with a simple long put strategy, anticipating that weaker foreign sales may result in lowered corporate earnings forecasts for the first quarter of 2026. Since this is a gradual decrease rather than a sharp drop, we likely won’t see a surge in volatility, but a gradual increase is possible. Implied volatility on TRY options has been decreasing since late 2025, falling from over 30% to around 22% now. This makes buying options more affordable and suits strategies that expect a market move rather than immediate chaos. Create your live VT Markets account and start trading now.

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