S&P signals continued confidence in Turkish lira

According to an analysis published on October 20, there has been no significant increase in demand for foreign currencies despite the war in the Middle East and problems in the investment fund market. As of September, foreign currency deposits accounted for 38.7% of total bank deposits, unchanged from the beginning of the year. S&P noted that sustained confidence in the lira has helped the Central Bank of the Republic of Türkiye (CBRT) partially rebuild its foreign exchange reserves.

Assessing the impact of the investment fund investigation, the agency reported that forced asset sales triggered sharp stock market declines and approximately $18 billion in fund liquidations. However, liquidity measures prevented the problems from spreading throughout the broader financial system. S&P expects Türkiye's average inflation rate to reach 30.9% in 2026 and 21.7% in 2027. The agency forecasts that the Turkish economy could withstand the shock from elevated energy prices if tight monetary and wage policies are maintained and foreign exchange reserves are preserved.