Video|27 March 2025

MENA | Can Turkey Keep the Lira Steady?

MENA | Can Turkey Keep the Lira Steady?


In response to the lira sell-off last week, initial estimates suggest that the central bank of Turkey spent $12bn to defend the currency, after slipping almost 4% following the arrest of Istanbul’s mayor. This week, the Turkish lira has been relatively stable at around 38 USDTRY, supported by the uplift in overnight interest rates. We expect the central bank to leave rates unchanged in April and scale back cuts in the coming months, leaving the policy rate above 30% by the end of the year.

In February, Lebanon’s inflation eased to 15.6%, down from 16.1% in January, despite the inflationary impacts of the ongoing conflict. Prices of clothing and footwear, household equipment and communication led the slowdown in inflation. Meanwhile, in Kuwait, inflation continued to hover around 2.5% for the third consecutive month despite softening clothing and recreation prices, and we expect inflation to remain elevated around this rate through the end of the year.


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