Striking commentary on the Turkish economy: When will the rise of the Dollar and Euro slow down?
As the Dollar rises toward 41.3 TL and the Euro toward 49 TL, economists have evaluated the possibility of a "devaluation" in Turkey in the near future. While Brookings Institution Chief Economist Robin Brooks commented that it is "inevitable," experts in Turkey have laid out different scenarios.
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Robin Brooks, chief economist at the Washington-based think tank Brookings Institution, has argued that Turkey is "inevitably drifting toward devaluation" due to the economic policies it is pursuing.
Making assessments on his social media account, Brooks stated that Turkey's current account deficit is occasionally financed by the Central Bank's official foreign exchange reserves, and used the following expressions:
“Turkey is constantly living beyond its means and is trapped in an endless cycle of currency crises. This is a result of President Erdoğan's effort to remain in power. Constantly boosting growth to encourage imports makes devaluation inevitable.”
THE EXCHANGE RATE REGIME IN TURKEY: "MANAGED PARITY"
Speaking to DW Türkçe, Dr. Atahan Çelebi, Chief Strategist at Stratejistanbul Financial Solutions (STRFS), said that although there is officially a floating exchange rate regime in Turkey, the currency system can be defined as "managed parity" due to interventions by the Central Bank and the government.
Emphasizing that the TL is not excessively strong in long-term trends, Çelebi assessed, "In the short term, foreign exchange increases are lagging behind inflation and interest rates. Turkey is making a fundamental mistake by trying to fight inflation and keep the exchange rate stable at the same time."
DOLLAR EXPECTATIONS RISE DESPITE GOVERNMENT PROGRAM
According to the September 2025 Market Participants Survey announced by the Central Bank of the Republic of Turkey (TCMB), the year-end dollar exchange rate expectation was 43.85 TL. The expectation for 12 months ahead rose to 48.96 TL.
MARKETS VOLATILE DUE TO POLITICAL DEVELOPMENTS
Borsa Istanbul has experienced sharp fluctuations recently due to political developments. While the stock market fell by 18 percent following the detention of Ekrem İmamoğlu, it recorded a 31 percent rise in the last 5 months. During the judicial process regarding the CHP convention, a 10 percent loss and a subsequent 7 percent recovery were observed in the stock market.
During this period, Turkey's 5-year credit default swap (CDS) fell to 240 points, seeing its lowest level since February 2020.