Turkey is seeing a dramatic collapse in its exchange rate against the dollar—with the Turkish lira now surpassing 48 liras to one dollar (and 56 liras to the euro). That’s a jump of more than ten percent since the start of 2026, when one dollar was worth 43 Turkish liras.
1+Erdoğan’s government had hoped to turn things around and even announced that the inflation rate would drop to single digits by year’s end. In reality, the central bank governor recently raised the inflation forecast from 26% to 28%. On top of that, a survey of 32 local banks predicts inflation will reach 29.50% by the end of 2026, while the dollar-lira exchange rate is expected to hit 51.7250 by year’s end.
Deteriorating security conditions and fears of renewed fighting in the region are hammering the economy. Because Turkey imports more than 90% of its oil, any spike in energy prices or disruption in commodity availability drives up production costs and consumer prices across the country.
1+So behind Erdoğan’s threats against Israel and his tightening military grip on Turkish territory lies a deep economic crisis. While the Turkish president has repeatedly declared his desire to restore Turkey to the greatness of the Ottoman Empire era, forecasts in his own country suggest Turkey is unlikely to escape the crisis it has entered anytime soon.