05.06.2026 09:40
Dollar/TL reached an all-time high of 46.08. While political developments, the Central Bank's foreign exchange sales, declining reserves, and rising geopolitical tensions in the Middle East have been effective in the currency's rise, market attention has turned to the TCMB's interest rate decisions.
A new record was seen in the Dollar/TL. The exchange rate started the day by testing the 46.08 level and reached its all-time high.
The Dollar has gained 7.37% against the Turkish Lira since the beginning of the year, while the increase over the last month was 0.56%.
FOREIGN EXCHANGE SALE BY THE CBRT
It was reported that the Central Bank of the Republic of Turkey sold approximately 10 billion dollars in foreign currency following the court decision regarding the appointment of the former administration under Kemal Kılıçdaroğlu's chairmanship in the CHP.
During this period, increasing concerns over the Iran tension also affected the markets. Investors are monitoring the potential impact of political developments on the election process and economic policies.
20 BILLION DOLLAR LOSS IN RESERVES
The foreign exchange reserves, which were at the level of 73 billion 432 million dollars before the war, decreased to 53 billion 233 million dollars in the week of May 29 after a volatile period.
Thus, the decline in the Central Bank's foreign exchange reserves amounted to 20 billion 199 million dollars.
INTEREST RATE CUT EXPECTATIONS WEAKENED
In the markets, the expectation that the CBRT could continue with gradual interest rate cuts throughout the year had been prominent before the war. However, due to political uncertainties and tensions in the Middle East, a significant portion of economists assess that it will be difficult for the Central Bank to cut interest rates for most of 2026. Some market players think that an interest rate increase could also be on the table due to rising risks.
EYES ON THE MPC MEETING
The CBRT stated that all options are on the table ahead of the Monetary Policy Committee meeting on June 11. At the last MPC meeting in April, the policy rate was kept constant at 37%. Some economists evaluated the failure to reflect the steps keeping overnight rates at 40% into the policy rate as a "missed opportunity."
MIDDLE EAST TENSION WEIGHS ON MARKETS
As uncertainty continues regarding the peace talks between the US and Iran, escalating tension in the Middle East increases investors' risk perception. Hezbollah, backed by Iran, rejecting a ceasefire with Israel and Israel's announcement that it will not withdraw its troops keep the tension high in the region.