The Turkish lira has fallen to a new all-time low against the US dollar, with the USD/TRY exchange rate trading near 45.58 on 18 May.
The latest move extends one of the longest-running currency declines among major emerging markets, keeping inflation, dollar demand and crypto-related stablecoin activity in focus.
Purchasing power collapse since 2010
The scale of the Turkish lira decline has drawn widespread attention, with reports highlighting that the currency has lost nearly all of its value against the dollar since 2010.
At the time, the average exchange rate stood at around 1.50 lira per dollar, meaning one lira was worth approximately $0.66. At current levels, one lira is now worth close to $0.022.
Inflation remains major challenge
The currency’s weakness continues to be driven by high inflation, demand for hard currency, energy import costs and concerns over economic policy.
Turkey’s annual inflation rate stood at 32.37% in April, while monthly consumer prices rose 4.18%.
The Central Bank of the Republic of Türkiye has maintained its one-week repo rate at 37% in an effort to support the currency and contain inflation pressures.
Pressure on households and businesses
The weakening lira continues to affect everyday life in Turkey by increasing the cost of imported goods, fuel, food and other dollar-linked products.
Businesses and households increasingly monitor exchange rates closely as the currency directly impacts living costs and purchasing power.
Stablecoin demand rises
The Turkish lira decline has also strengthened demand for dollar-linked digital assets such as stablecoins, particularly USDT and USDC.
Many users in Turkey turn to stablecoins as a way to access dollar exposure and protect savings from inflation and currency depreciation.
Analysts note that stablecoin demand often rises in countries experiencing prolonged currency weakness and economic uncertainty.
Investors remain cautious
Despite efforts by Turkish authorities to stabilise the economy, investor concerns remain over inflation, foreign reserves and the sustainability of Turkey’s economic strategy.
Markets continue to closely monitor developments in monetary policy and inflation trends as the lira remains under pressure.
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