The Turkish lira extended its gradual decline to 41.1 per USD in September, marking a fresh record low. The central bank, operating through state-backed commercial lenders, maintained a strong presence in the foreign exchange market in an effort to keep tight control over the currency. Political tensions added to the pressure after an Istanbul court annulled appointments made by the main opposition Republican People’s Party (CHP) and replaced them with government-appointed trustees. In response, the CHP called for protests in Istanbul. On the economic front, inflation eased to 32.95% in August but still came in above market expectations of 32.6%. Meanwhile, GDP expanded 4.8% year-on-year in Q2 2025, the fastest growth since Q1 2024, fueling speculation that the central bank has limited room to cut interest rates this month.