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TALAYINSIGHT
RegionTürkiye and Its Neighbourhood

MediumIV Macro Policy & Sovereign Debt4 November 2026, Wednesday

Lira's real value climbs to its highest since February 2020

According to CBRT data, the CPI-based real effective exchange rate rose 2.66 points to 107.76 in October. The index has risen 7.79 points in a year, leaving the lira at its most expensive in six years.

Location: ANKARA

The real effective exchange rate measures the lira's value against trading partners' currencies, adjusted for inflation differentials; a rising index means the lira is appreciating in real terms. According to Bloomberg HT on 4 November, the September reading was revised from 105.45 to 105.10. October's 107.76 is the highest since February 2020. The index based on domestic producer prices (D-PPI) also rose 1.67 points to 102.90.

According to the CBRT, the dollar gained an average of 1.63% against the lira in October, while the euro lost 1.07%. In the same month CPI rose 2.58% month on month and D-PPI 1.65%. Because the currency's monthly depreciation lagged inflation by about 1 point, the lira became more expensive in real terms. Dünya newspaper gave the September reading of the D-PPI-based index as 101.23.

The CBRT noted that Turkish CPI and the nominal currency basket pushed the index up, while the world CPI basket pulled it down. For exports to the euro area, two effects compounded in October: the euro weakened against the lira, and costs in Türkiye rose faster than the exchange rate.

Talay assessment

Bottom line

By keeping the pace of depreciation about 1 point below inflation, the CBRT is supporting disinflation through real appreciation. The 107.76 level suggests the tool is nearing its limit, since the three-month underlying trend held flat at 1.8% in the same month. Talay's reading is that real appreciation will continue for a few more months, but its cost will accumulate among exporters selling into the EU market.

Likely effects

  • Export competitivenessNegative1–6 months

    With the euro 1.07% cheaper against the lira and the real exchange rate rising, margins of exporters to the EU are squeezed from two sides.

  • DisinflationPositiveWeeks

    An expensive lira caps price increases in non-energy, non-food goods; its contribution to goods disinflation continues.

  • Exchange rate policyUncertain1–6 months

    As the real exchange rate rises, industry pressure grows on the CBRT to quicken the monthly pace of depreciation.

Possibilities, ranked

  1. 1
    Real appreciation continues60%

    Monthly depreciation stays below inflation and the index holds around or above 107 in November.

    Watch: November real effective exchange rate data and the monthly CPI gap

  2. 2
    Pace of depreciation quickens25%

    The CBRT lifts monthly depreciation above 2% and the index falls back below 105.

    Watch: The 2% threshold for the dollar/lira's average monthly depreciation

  3. 3
    The euro recovers15%

    The euro strengthens against the lira, easing margin pressure in the EU market even as the index rises.

    Watch: Average monthly change in EUR/TRY

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Historical context

USD/TRY, last 6 months

44.7546.1947.6349.0650.5007/0512/0620/0724/0829/0904/1116 September 2026 — BIST 100 fell 5.54% to 13,122.58 points as 17 stocks closed at the floor price117 September 2026 — Diesel passed 100 lira a litre in Türkiye for the first time: a third consecutive increase221 September 2026 — Central government debt stock rose by 422.5 billion lira in August to 15.89 trillion lira; foreign-currency share at 51%321 September 2026 — The dollar reaches an all-time high of 48.82 lira as the BIST 100 falls 1.92% at midday to 13,028.71 points421 September 2026 — The 72,825 dwt tanker LR Stephanie is struck in Hormuz and two seafarers wounded; weekend transits fall to 17 ships521 September 2026 — Export producer prices rose 32.60% year on year in August, with the increase in energy reaching 106.24%623 September 2026 — Dollar hits new high of 48.84 lira on 23 September; calculations show CBRT reserves fell $13.9 billion in 4 weeks to $174.5 billion724 September 2026 — BIST 100 falls 2.74% to 12,888 points on 24 September as the 2-year lira bond yield climbs to 37.09%: Fed and oil pressure hit Turkish assets824 September 2026 — CBRT official data: in the week of 18 September gross reserves fell by 4.3 billion dollars to 174.4 billion, net reserves by 6.4 billion to 55.8 billion925 September 2026 — Türkiye's CDS tops 250 for the first time since 27 May: as the $18 billion liquidation of 131 funds proceeds, Erdoğan says no systemic risk; 45 arrested1026 September 2026 — Yılmaz puts the war's impact on inflation at 7 points, citing CBRT calculations; 10-year yield ended the week higher at 32.77% on 25 September1130 September 2026 — BIST 100 enters a bear market after losing 5% in two days1210 October 2026 — Türkiye extends FX-loss exemption in capital-loss tests for another year134 November 2026 — Lira's real value climbs to its highest since February 202014
  1. 116/09 · BIST 100 fell 5.54% to 13,122.58 points as 17 stocks closed at the floor price
  2. 217/09 · Diesel passed 100 lira a litre in Türkiye for the first time: a third consecutive increase
  3. 321/09 · Central government debt stock rose by 422.5 billion lira in August to 15.89 trillion lira; foreign-currency share at 51%
  4. 421/09 · The dollar reaches an all-time high of 48.82 lira as the BIST 100 falls 1.92% at midday to 13,028.71 points
  5. 521/09 · The 72,825 dwt tanker LR Stephanie is struck in Hormuz and two seafarers wounded; weekend transits fall to 17 ships
  6. 621/09 · Export producer prices rose 32.60% year on year in August, with the increase in energy reaching 106.24%
  7. 723/09 · Dollar hits new high of 48.84 lira on 23 September; calculations show CBRT reserves fell $13.9 billion in 4 weeks to $174.5 billion
  8. 824/09 · BIST 100 falls 2.74% to 12,888 points on 24 September as the 2-year lira bond yield climbs to 37.09%: Fed and oil pressure hit Turkish assets
  9. 924/09 · CBRT official data: in the week of 18 September gross reserves fell by 4.3 billion dollars to 174.4 billion, net reserves by 6.4 billion to 55.8 billion
  10. 1025/09 · Türkiye's CDS tops 250 for the first time since 27 May: as the $18 billion liquidation of 131 funds proceeds, Erdoğan says no systemic risk; 45 arrested
  11. 1126/09 · Yılmaz puts the war's impact on inflation at 7 points, citing CBRT calculations; 10-year yield ended the week higher at 32.77% on 25 September
  12. 1230/09 · BIST 100 enters a bear market after losing 5% in two days
  13. 1310/10 · Türkiye extends FX-loss exemption in capital-loss tests for another year
  14. 1404/11 · Lira's real value climbs to its highest since February 2020

Sources

  1. Bloomberg HT — The lira's real value at a six-year high
  2. Dünya — Real effective exchange rate rose 2.66 points in October
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