USD/TRY: Stable path with renewed carry interest – ING

ING analysts Muhammet Mercan, Frantisek Taborsky and James Wilson note that the Turkish Lira (TRY) has stabilised after US-Iran tensions eased, with the Central Bank of Turkey (CBT) maintaining market confidence and a steady USD/TRY path. They highlight reduced but now recovering TRY long positions, lower FX reserves, and project USD/TRY to move gradually toward 46.6 by mid‑2026 as carry trades resume.

Lira seen steady as carry returns

"Similar to the rest of the EM space, we have seen some relief in Turkey following signs of de-escalation in the US-Iran conflict. This suggests that the worst of the US-Iran conflict should be over, and the central bank has been relatively untroubled in maintaining market confidence and a stable USD/TRY trajectory. This has been helped by significant rhetorical activity from officials in recent weeks."

"The TRY market has navigated the US-Iran conflict by significantly reducing long positions, which have been cut approximately in half. Additionally, CBT FX reserves declined from a peak of US$210bn to about US$161bn, reflecting the broader sell-off in global gold markets. However, recent market data suggests a resumption of long positions in TRY, which is in line with improving global sentiment."

"Overall, we expect USD/TRY to remain on a stable trajectory up to 46.6 by mid-year and the market will gradually resume long carry trades in TRY."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)