FX.co ★ Turkish Lira Maintains Controlled Devaluation

The Turkish lira hit a record low of 44.9 per USD in April, as the Central Bank of Turkey continued its policy of controlled, gradual depreciation through active intervention in the foreign exchange market to limit further weakening. The TCMB kept its key policy rate unchanged for the second consecutive decision in April, consistent with its recent pivot away from previously signaled rate cuts—a shift forced by the outbreak of war in the Middle East, which drove up energy prices and heightened inflation risks.

In the first week of March alone, the central bank sold more than USD 8 billion in foreign exchange to support the lira. In addition, the TCMB suspended reverse repo auctions, prompting banks to raise the lira overnight reference rate to 40% amid tighter liquidity conditions. This deliberate restriction of cash supply has further tightened financial conditions and helped stabilize the currency.