The Turkish lira hit a new record low of 41.9 per US dollar in October 2025, extending its year-to-date decline to around 18%. The currency’s gradual and managed depreciation has persisted since July 2023. The Central Bank of Turkey has maintained a firm presence in the forex market to keep tight control over the lira’s movement and the government continues to pursue a policy of so-called “real appreciation”. On the monetary policy front, the central bank cut rates by 100bps in October, in line with expectations. This marked the third consecutive rate cut, though the smallest in the current easing cycle, as inflation accelerated for the first time in fifteen months, reaching 33.29% in September. Separately, a Turkish court dismissed a case seeking to remove the main opposition party’s leader and annul its 2023 congress, a decision that eases pressure on President Erdogan’s opponents and offers some relief from the political turmoil that has sharply weighed on Turkish markets this year.