Lately, I've been watching the trend of the Turkish lira. To be honest, the story of this currency is quite complex and worth a deep discussion.

First, let's talk about the current situation. Since the start of 2026, the USD/TRY has risen from around 43 to about 44.85, with the lira continuing to depreciate. The pace of depreciation seems to have slowed, but there are actually many underlying issues behind this. Although the Turkish central bank maintains an extremely high policy rate of 37% and is selling large amounts of USD and gold to support the exchange rate, market confidence in this policy remains insufficient.

Why is that? The core reason is that Turkey’s inflation is complicated and stubborn. Although the inflation rate in March dropped to 30.87%, it still remains high, which is not good news. High inflation combined with low policy credibility creates a vicious cycle— the central bank cuts interest rates to stimulate the economy, prices soar; markets panic, capital outflows; the lira depreciates, import costs rise, and inflation accelerates further. Turkey’s economic structure is highly dependent on imports; energy and raw materials are bought in USD, so when the lira weakens, costs immediately go up.

Historically, the lira even depreciated to 1.65M per USD in 2001. This is not an exaggeration; it actually happened. Although a currency reform was carried out in 2005, this history shows that the lira has long been cursed by exchange rate volatility. In recent years, political uncertainty has also increased—local elections, international relations fluctuations—all making foreign investors more cautious about Turkish assets.

Therefore, the root causes of Turkey’s inflation are multi-layered—erratic policies, economic imbalances, rapid depletion of foreign exchange reserves, rising geopolitical risks. These factors stack up and push the lira toward a long-term depreciation abyss.

Looking at short-term trends, USD/TRY is likely to fluctuate between 44.8 and 46.5. The central bank’s interest rate decision at the end of April will be a key point to watch. EUR/TRY is currently between 52.7 and 53.0; if the euro remains strong, it may oscillate between 52.5 and 53.5. The Taiwan dollar against the lira is relatively stable, expected to range from 1.40 to 1.48. But the risk signals are clear— the central bank’s foreign reserves are rapidly depleting, and if intervention continues to drain reserves too low, the lira could experience a sharp plunge.

Is it still worth investing in the lira now? Honestly, the lira has already depreciated about 19% over the past year. Analysts generally forecast another 8% to 15% decline in 2026, possibly even more. High interest rates seem attractive, but after accounting for inflation, real returns are often negative. Holding long-term means your purchasing power keeps shrinking; even with high interest income, it could be wiped out by exchange rate depreciation.

If you insist on investing, my advice is: first, treat it as a short-term volatility tool— the lira is very volatile, and experienced traders can seize short-term opportunities; second, don’t expect appreciation— the long-term trend is downward; third, if you are optimistic about Turkey’s reform prospects, consider staggered, diversified positioning— buy small amounts of lira with USD in phases, and use technical rebounds for short-term trades.

In terms of investment methods, bank currency exchange thresholds are low but liquidity is poor; futures trading volume is sparse and not suitable for ordinary investors; contracts for difference (CFDs) are actually more practical for capturing lira fluctuations— they require less capital, allow two-way trading, and offer flexible leverage. But regardless of the method chosen, closely monitor the Turkish central bank’s policy moves and inflation data, as these are key factors influencing the lira’s trend.

Overall, although the Turkish lira may seem insignificant, its trend is quite clear. The turning points are identifiable, making it suitable for traders with some risk tolerance who actively follow policy news. But for conservative long-term investors, it’s probably best to stay away.