I've been closely monitoring the trend of the Turkish lira recently and found that this currency's volatility is particularly worth studying. The story of the Turkish lira (TRY) is actually quite interesting; it hit a historic low of 1.65M to 1 in 2001 after a disastrous crash, barely survived after major reforms in 2005, but over the years, it still cannot escape its fate of high volatility.

The core issue is: why has the Turkish lira exchange rate been depreciating? Simply put, it's the deadly combination of "high inflation" plus "policy credibility explosion." Since last year, the lira has depreciated about 19% against the US dollar, and analysts generally forecast another 8 to 15% depreciation throughout 2026. Although the central bank maintains a high policy interest rate of 37% to attract capital, after deducting over 30% inflation, the real return is actually negative, making it impossible to offset the loss of purchasing power.

I notice that the most critical problem lies in Turkey's economic structure. Energy and raw materials all need to be purchased in dollars, so when the lira depreciates, import costs soar, prices rise accordingly, and market confidence in the lira diminishes further. Coupled with increased political uncertainty and rising geopolitical risks in recent years, foreign investors have become very cautious about Turkish assets, leading to accelerated capital outflows. The central bank has already spent billions of dollars in foreign exchange reserves to support the lira; if this trend continues, it will eventually be forced to abandon its support.

Looking at the performance of the Turkish lira from early 2026 to mid-May, USD/TRY has moved from around 43 at the start of the year to about 44.85 now, with April even repeatedly hitting new historic lows. In the short term, the exchange rate is likely to fluctuate between 44.8 and 46.5, especially after the central bank's rate meeting on April 22. If the central bank maintains the 37% high interest rate, the depreciation of the lira will be relatively controlled; but as soon as the dollar rebounds, inflation data exceeds expectations, or geopolitical risks increase, the lira will face phased depreciation pressure.

EUR/TRY is roughly trading between 52.7 and 53.0, with the euro relatively strong but still unable to offset Turkey's high inflation. As for TWD/TRY, it's currently around 1.42 to 1.43, with a short-term expected fluctuation between 1.40 and 1.48, which is a reference for Taiwanese investors.

So, is it worth investing in the lira now? Honestly, yes, but with mental preparation. The lira is not suitable for conservative long-term investments because the long-term trend is slow depreciation with occasional rebounds. However, if you have short-term trading experience and can identify event-driven opportunities, monthly volatility of over 10% in the lira can actually be a good trading opportunity. Staggered positioning, short-term trading, and avoiding all-in are more practical strategies.

There are several ways to invest in the Turkish lira. Bank currency exchange is the simplest but has large spreads and low liquidity, suitable for travel or business. Futures trading allows for two-way trading and leverage, but CME's USD/TRY futures have low trading volume and liquidity, making it difficult for retail investors to enter. Conversely, CFDs (Contracts for Difference) are the most practical—opening an account with about $50, supporting both long and short positions, with leverage over 50 times—making them the most capital-efficient option for traders looking to capture lira volatility.

In summary, although the Turkish lira isn't a widely watched currency, its trend is quite clear, and the factors influencing its reversal are very evident. If you can tolerate high volatility and have some trading experience, you can choose suitable products and strategies based on your risk appetite. Most importantly, keep a close eye on Turkey's macroeconomic data and political news, as these are often key to judging the direction of the Turkish lira exchange rate.