The Turkish lira (TRY) is the official currency of Turkey and the country’s most important financial asset. As Turkey’s economy continues to develop and integrate into the global financial system, understanding the lira is essential for anyone doing business with or in Turkey. This in-depth guide covers everything you need to know about the TRY in 2023 – from its history and current value to financial regulations and predictions for its future.

A Brief History of the Turkish Lira

Origins and Reforms

The Turkish lira has its origins in the Ottoman Empire, when the Ottoman lira was used as the official currency starting in 1844. Following the empire’s collapse after World War I, the Republic of Turkey was founded in 1923 and introduced the Turkish lira to replace the Ottoman version. In 2005, the New Turkish lira (YTL) was introduced, dropping six zeros from the old currency. This was done due to high inflation devaluing the old lira. In 2009, the name was changed back to just the Turkish lira.

Financial Crises and Fluctuations

Over its history, the lira has undergone periods of severe inflation and financial crises. In 1994, inflation climbed over 125% and led to the lira losing half its value. The 2001 Turkish economic crisis led to further inflation and devaluation of the lira. Most recently, following global recession in 2009, the lira dropped in value compared to the US dollar and euro. Ongoing bouts of high inflation and devaluation have contributed to lira instability.

Response to Recent Currency Decline

From 2017 to 2021, the lira plunged dramatically versus the US dollar, losing over 60% of its value. This prompted Turkey’s central bank to raise interest rates to stabilize the currency. However, in 2022 under pressure from President Erdogan to lower rates to boost growth, the central bank cut rates despite high inflation. This accelerated the lira’s decline and crush its value further. By the end of 2022, it had lost over 70% against the dollar in just 2 years.

Current Exchange Rates and Value

Lira to USD Rate

As of August 2022, the exchange rate for the Turkish lira to the US dollar is approximately 18.9 TRY to 1 USD. This means it takes 18.9 lira to purchase one US dollar. Over the past decade, the lira has consistently lost value versus the dollar, apart from a brief recovery during 2020. At its peak in 2021, the lira reached 9.5 per dollar, showing how sharply it has declined recently.

Lira to EUR Rate

The current exchange rate for lira to euro is approximately 18.3 TRY to 1 EUR. Like with the dollar, this shows how much the lira has fallen versus the euro as well. Back in 2012, the exchange rate was just 2.3 lira to the euro. The lira has plunged dramatically against both major currency counterparts.

Black Market and Parallel Exchange Rates

Due to capital controls and concerns over the lira’s stability, a black market for foreign currency exchange has emerged in Turkey. On the streets, lira to dollar rates can run from 20-25 per dollar, considerably higher than the official exchange rate. This wide gap with the parallel exchange market underscores the pressure on the lira and different valuations of its worth.

Factors Influencing the Turkish Lira’s Value

Several key factors help explain the lira’s fluctuating value and current decline:


Extremely high inflation in Turkey, reaching over 80% in 2022, has crushed the lira’s purchasing power domestically. Prices for imported goods have skyrocketed, and the lira has weakened as a result. The central bank has been unable to control inflation so far.

Interest Rates

To defend the lira, interest rates were hiked to 24% in 2021 before being cut to 9% by late 2022. Lower rates have spurred more lira selling and dollarization, weighing on the currency further. This unorthodox monetary policy has roiled markets.


As Turks lose confidence in the lira amid high volatility and inflation, more are choosing to hold dollars or euro. This rising “dollarization” means less demand for the lira, putting additional downside pressure on its value.


Geopolitical tensions, like Turkey’s opposition to Sweden joining NATO and conflict with Kurdish groups, has increased instability in the country. This has weakened international confidence in the lira. Ongoing domestic political pressures have added uncertainty as well.

Trade Deficits

Rising imports and energy costs have driven large trade deficits for Turkey. This means more lira flows out of the country. In 2022 alone, Turkey’s trade deficit has topped $100 billion.

TRY Forecasts and Predictions

In light of the factors weighing on the lira, most analysts see it remaining under pressure in 2023. Here are some predictions:

  • BNP Paribas – Forecasts the USD/TRY rate rising to 23 by the end of 2023, unless policy credibility improves.
  • Goldman Sachs – Estimates the lira falling to 25 per dollar by year’s end, driven by Turkey’s economic model and policies. Sees inflation staying above 65%.
  • Credit Suisse – Expects the lira to hit 20 per dollar by mid-2023 and to continue seeing broad depreciation.
  • JPMorgan – Predicts the lira falling to 30 by the second quarter of 2023 if Turkey sticks to FX interventions over rate hikes. Sees no recovery ahead.
  • Capital Economics – Projects the lira dropping to 40 per dollar by 2025, with Turkey unwilling to take necessary policy steps. Expect prolonged, serious crisis.

The negative projections indicate most experts see further declines for the troubled Turkish currency in the next 1-2 years. A drastic policy recalibration seems required to stabilize and rebuild confidence in the lira.

Buying, Selling and Trading Lira (TRY)

How to Buy Lira

There are several options for obtaining lira if you need the currency:

  • Turkish banks and exchange offices – Visit a Turkish bank or currency exchange booth at airports/banks to directly exchange dollars or euro for lira. Rates may vary.
  • Online currency brokers – Websites like Oanda, FxPro, and XE allow you to buy and transfer lira electronically using a bank account. Compare rates across brokers.
  • Foreign exchange ATMs – Many ATMs in Turkey dispense lira using debit/credit cards. Transaction fees and exchange rates apply. Check with your bank.
  • Peer-to-peer transfer apps – Apps like Wise allow Turks abroad to send lira to your bank account. Useful for remote transactions.
  • Turkish shops/businesses – Some businesses in Turkey may accept payment in dollars or euro to provide you lira. Worth checking if you need cash.

How to Sell or Convert Lira

If traveling or doing business in Turkey, you may need to sell any unused lira before leaving. Options include:

  • Banks and exchange offices – The easiest way to convert lira is visiting a bank/exchange and trading for dollars, euro or another desired currency.
  • ATMs – Many ATMs in Turkey will allow you to withdraw dollars with your debit card and convert your lira. Fees/rates apply.
  • Transfer apps – You can transfer lira to apps like Wise and convert to other currencies. Deposit the money in your bank.
  • P2P transfers – Turks or businesses may buy your leftover lira through peer-to-peer transfers if you connect online or in person.
  • Online currency brokers – Open an account with a regulated broker to sell your digital lira holdings and withdraw the converted money.

Investing and Trading Lira

Investors can gain exposure to the lira via:

  • Lira currency futures – Futures contracts tracking the TRY/USD exchange rate can be bought on the Chicago Mercantile Exchange. Allows speculating on lira moves.
  • Turkish equities – Stocks trading on the Borsa Istanbul provide indirect lira exposure. Can hedge lira risk this way.
  • TRY forex trading – Actively trading the TRY/USD and TRY/EUR currency pairs allows profits from lira swings. Utilize leverage through a forex broker.
  • CFDs – Contracts for difference connected to the lira exchange rate can be traded through many brokers. Provide leveraged directional exposure.
  • Spread betting – Similar to CFDs, spread betting allows leveraged bets on lira moves without direct currency ownership.

Financial Regulations and Limits

The Turkish government imposes certain restrictions and transaction limits on foreign currency use:

  • Foreign currency sales by banks are restricted to only fund travel, education, health expenses, and more.
  • Turkish corporates are limited to only holding a maximum of 20% of their capital in foreign currency.
  • Foreigners face limits on buying and holding Turkish property or other assets valued in lira.
  • Cash withdrawals using foreign debit/credit cards are limited to 10,000 lira per month.
  • Banks must report transfers abroad over 100,000 lira, to prevent capital flight.
  • Foreign currency loans must primarily be used only to finance exports.

These capital controls aim to prop up the lira by keeping foreign currencies in the country. But it prevents free flow of money and wider use of dollars/euro.

The Importance of the Lira for Turkey’s Economy and Future

As Turkey’s national currency, the lira plays a critical role in the country’s economic outcomes and prospects:

  • Store of value – The lira provides a means for Turks to save money, transfer wealth, and engage in commerce and trade. Its declining value has disrupted this role.
  • Price stability – Sharp drops in the lira’s value have severely hindered its ability to hold prices steady in the economy, contributing to sky-high inflation.
  • Central bank credibility – The lira’s fluctuations test the central bank’s competence and independence in setting effective monetary policy. This can undermine investor confidence.
  • Financial depth – Deeper lira-denominated financial markets are needed to expand Turkey’s banking sector and financial system. Currency volatility hinders progress.
  • Quality of life – For average Turks, the lira’s diminished spending power due to inflation directly lowers living standards, reducing consumption.

Restoring faith in the Turkish lira and getting inflation under control is vitally important for the economy to stabilize and get back on a growth trajectory again. How policymakers handle these currency challenges will shape Turkey’s outlook.


The Turkish lira has faced enormous instability and uncertainty in recent years, posing serious challenges for Turkey’s economy. With high inflation battering its value, loss of trust domestically, and no recovery in sight, the lira looks poised to remain under pressure versus the dollar and euro into 2023.However, if Turkey makes difficult political choices to rebuild central bank independence and orthodox monetary policy aimed at taming inflation, the lira could eventually rebound. For now, extreme caution is warranted for anyone exposed to the beleaguered currency. But with smart reforms, the story of the Turkish lira may not be all bleak.