Turkish lira under pressure again as inflation and currency support costs bite

After a period of relative stability during March and April this year, the lira’s downward trajectory once again picked up pace in May.

Turkey’s trade ministry has been keen to paint a positive picture, noting that use of the lira in foreign trade rose by 72% in the first three months of 2022. However, Mustafa Sonmez, a Turkish economist, and Atilla Yesilada, Turkey country analyst at GlobalSource Partners, point out that the currency’s share of Turkish foreign trade is miniscule compared with the 71% that is denominated in dollars and 21% in euros.