According to ING analysts Muhammet Mercan, Frantisek Taborsky, and James Wilson, the Turkish Lira (TRY) has stabilized following the easing of US-Iran tensions, with the Central Bank of Turkey (CBT) successfully maintaining market confidence and a steady USD/TRY exchange rate trajectory [1]. The analysts note that the worst of the US-Iran conflict appears to be over, and the CBT has been relatively untroubled in its efforts to keep the currency stable, aided by significant rhetorical activity from Turkish officials in recent weeks [1].
The TRY market responded to the conflict by significantly reducing long positions, which were cut approximately in half. Additionally, CBT's foreign exchange reserves declined from a peak of US$210 billion to about US$161 billion, a drop attributed to the broader sell-off in global gold markets [1]. However, recent market data indicates a recovery, with a resumption of long positions in TRY, reflecting improving global sentiment [1].
Looking ahead, ING projects that the USD/TRY will remain on a stable path, gradually moving toward 46.6 by mid-2026 as carry trades in TRY resume [1]. This outlook suggests renewed investor interest in Turkish assets as geopolitical risks subside and market conditions improve [1].
CONCLUSION
The Turkish Lira has regained stability following the de-escalation of US-Iran tensions, with the Central Bank of Turkey maintaining market confidence. ING expects the USD/TRY to remain steady and gradually move toward 46.6 by mid-2026, supported by renewed carry trade interest. The market takeaway is cautiously optimistic, reflecting improving sentiment and a return to long TRY positions.