USD/TRY Forecast Note (current backdrop: mid-March 2026)

USD/TRY Forecast: Live Chart and Current Setup

The pair is trading at the 44.1-44.2 price range, and sits at the top of that recent consolidation zone as it continues its multi-month grind higher. The pair has closed the week (mid-March) at 44.17, just below its recent 52-week high at 44.30.

Before the geopolitical escalation, the Lira had been on the back foot against the US Dollar for various factors, stemming from the damaging impact of the pandemic on its tourism industry and domestic growth, to foreign exchange scarcity and issues between the sitting president and the series of central bank chiefs over the direction of monetary policy. Currently, two driving forces are pushing the USD/TRY.

• The oil shock risk premium is hurting Turkey’s import-dependent economy, and this is also feeding concerns about domestic inflation and how far the bar can be raised for further rate cuts.
• CBRT policy vs. the general Lira depreciation: The Central Bank of the Republic of Turkey (CBRT) has conducted several currency interventions to prevent the Lira from going into free fall, while also keeping monetary conditions tight. This supports the TRY in the near term, but it doesn’t provide enough support to reverse the TRY’s long-term downtrend at the moment.

USD/TRY Forecasts: What is driving the USD/TRY currently

1. CBRT policy adjustment: the Turkish central bank has adjusted to a rate pause setting, holding the 1-week repo rate at 37% on 12 March due to the market instability and energy price shock experienced recently. This has effectively put the easing cycle on hold as the country continues to battle the current inflationary environment and fears of renewed inflation due to the conflict.

2. Persistent inflation: The inflationary environment in Turkey remains persistent, with Reuters-linked reports indicating an annual inflation that still hovers in the low-30% area as of February 2026. This localized inflation makes Turkey particularly vulnerable to global inflation shocks arising from the current oil price spike.

3. Oil shock: Turkey is a net energy importer. Higher crude oil prices will lift inflation expectations, make it impossible for the CBRT to cut rates to stimulate the local economy, and worsen the country’s current account deficit. These factors will continue to pile pressure on the Lira.

USD/TRY Forecasts for Next Week: What to watch for

The three main catalysts for USD/TRY forecasts in the coming week are:

1. Oil price volatility: the market is bracing up for intense volatility in the coming week, as the International Energy Agency forecasts a supply hit in March, while at the same time aiming to see an unprecedented release of 400 million barrels of crude from emergency storage to ease price pressures. On the other hand, the US President is sending 5000 troops to open the Strait of Hormuz by force, according to reports from the UK Telegraph and several mainstream news media.

2. CBRT interventions: the markets will watch for any potential interventions if the USD/TRY reaches untenable heights, or if the apex bank makes adjustments to the overnight money lending rates (Turkish Lira Overnight Lending Rates or TLREF).

3. Revisions to local inflation expectations: the CBRT has previously pushed up its forecast range for local inflation higher, which has reset the 2026 inflation expectations higher. If there is further geopolitical deterioration that raises the globalized inflation risk premium, it could cause markets to reprice localized inflation expectations.

USD/TRY Forecast Scenarios

Base case: the pair continues its slow grind upwards, leading to a managed and modest upside push. The pair will likely remain in the 44.0-44.3 consolidation area, albeit with upside pressure from the oil risk premium and, subsequently, from inflation expectations. Potential for CBRT liquidity tightening and interventions will keep the upside push limited.

Bull case: The bull case scenario sees the pair breaking beyond 44.3 on the back of additional oil price spikes and a “higher for longer” risk of inflation in the country.

Bear case: the bear case scenario sees temporary relief for the TRY, as oil prices cool materially and the CBRT maintains a tight liquidity regime. Higher interest rates and lower oil prices will support the Lira in the near term, pushing USD/TRY lower and signaling a more corrective move than a downside reversal.

USD/TRY Forecast: Technical Outlook

The pair remains in a firm uptrend, with price action continuing to track the ascending trendline support. With the price holding above this trendline, the structure remains bullish, favouring an upside continuation to discover new highs.

The pair is now trading near the upper limit of its recent range, with the 44.20/44.25 price zone forming the nearest upside barrier. This zone is currently being tested, and a breakout will expose a pathway towards the 44.40 price mark, which serves as the next barrier and upside target. The current trendline support lies at 44.00/43.95, and the bulls need to defend it to retain the upside bias.

However, a breakdown of this trendline will shift attention to the secondary support at 43.80, while a broader support at 43.60 could emerge if the bulls fail to defend 43.80.

Overall, the price picture supports buying on dips, as a bearish reversal remains off the table for now.