$USDTRY The Turkish lira has truly hit a new all-time low against the dollar, and this decline is actually a result of two interconnected narratives: one driven by deliberate policy choices, and the other by external shocks.

USD/TRY is currently trading above 46.70, having lost between 17% and 17.4% of its value in the last 12 months, and the lira has depreciated by approximately seven percent since the beginning of the year. This appears to be more of a gradual and managed depreciation than a panic-style collapse, as the central bank shifted to a more orthodox framework with Mehmet Şimşek's arrival at the Treasury and Finance Ministry in 2023. The underlying idea of this strategy is to create a gradual real appreciation by allowing the lira to depreciate slower than inflation, supported by foreign exchange interventions.

However, this managed decline scenario has been put to a real stress test in recent months. The energy shock triggered by the Iran war has posed a serious risk to the disinflation path, as Turkey is a heavily reliant economy on imports of oil and gas. Inflation rose for the second consecutive month in May, reaching 32.61%, prompting the central bank to keep interest rates unchanged for a third time in June. Therefore, the weakening of the lira is not only a monetary policy choice but also a direct reflection of a geopolitically driven energy cost shock.

From a technical perspective, the exchange rate has long been significantly above all moving averages, and the RSI indicator has remained in the overbought region almost continuously since mid-2022. This suggests that the market has priced in the weakening of the lira as a normalized trend, meaning that each new low is no longer a shock but a continuation of an expected process. Some analysts suggest that this outlook indicates the exchange rate could advance to 48 by 2026, although such predictions are subject to frequent changes due to political and economic uncertainties.

Structurally, it's important to emphasize that the central bank's independence in Türkiye is limited, and the president's power to change the bank's management has been used repeatedly in the past. Some analysts argue that the weak lira provides certain advantages to the economy by making exports cheaper and tourism more attractive, meaning this picture can be read not only as an indicator of weakness but also as part of a deliberate competitiveness strategy.

In conclusion, the picture here is closer to a deliberately managed devaluation process, driven by an energy shock and structural inflationary pressures, than to a pure capital flight panic scenario. For those following exchange rate and macroeconomic developments through Gate, the main point to watch is whether the central bank will continue with interest rate cuts in upcoming meetings, because a renewed rise in inflation remains the most critical factor directly testing the sustainability of this gradually managed decline strategy.
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