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USD to TRY Forecast: ING Targets 51.50 at End-2026 After Turkey Cuts Rates Foreign exchange analysts at ING expect the Turkish Lira to weaken against the US Dollar, but see demand for its high yields surviving Turkey's renewed interest-rate cuts. Turkey's central bank cut its policy rate by 100 basis points to 36% on Thursday, matching ING's pre-decision call.The US Dollar to Lira exchange rate was trading at 49.7372 on Friday, compared with ING's forecast of 51.50 at end-2026.
That implies roughly a 3.5% rise in USD/TRY, or a 3.4% decline in the Lira's Dollar value.
ING had linked its forecast to easing price pressures: "Inflation sentiment has improved after benign September data and expectations of weaker demand. We expect 100bp cuts in October and December, taking the policy rate to 35% by year-end, versus our 29.0% inflation forecast for year-end."
High interest income can coexist with a weaker Lira Frantisek Taborsky, ING's EMEA FX and fixed-income strategist, expects demand for Lira investments to survive the narrowing interest-rate advantage:
"Although crowded long TRY positions offer less and less carry, they remain popular in emerging markets, and we expect this demand to persist in the coming months despite renewed rate cuts."
"The recent weekly adjustment in USD/TRY does not alter the overall FX setup, and the carry trade continues. We expect a level of 51.50 USD/TRY by the end of the year."
Investors in a carry trade seek to earn more in interest than they lose through currency depreciation and funding costs.
Their willingness to hold Lira assets therefore need not imply an expectation that the exchange rate itself will strengthen.
A gradual decline was also central to MUFG's earlier assessment of the Lira's vulnerability to energy costs and weaker reserves, although ING places greater emphasis here on the durability of investment demand.
The fund shock creates room for cuts, but also risk Turkey's investment-fund disruption complicates the outlook: damage to household wealth and confidence can restrain spending and inflation, while financial losses could spread between institutions.
Taborsky's assessment before the decision was that the authorities had prevented the initial shock from becoming a wider flight from the currency:
"The authorities' swift response appears to have contained the fund shock, with no signs of systemic risk or a sharp rise in dollarisation, while foreign inflows have resumed."
Taborsky adds: "However, it may further weaken domestic demand through tighter liquidity, wealth losses and lower confidence. Repayments to smaller investors could cushion consumption, but counterparty exposures remain the main spillover risk."
Here, counterparty exposure means the possibility that trouble at one institution creates losses for others with financial claims on it.
The central bank's decision acknowledged weak domestic demand and slowing underlying inflation, while warning that elevated energy prices remained an upside risk.
It also retained the option of additional measures if unexpected developments in credit and deposit markets impaired the transmission of monetary policy.
What This Means for USD/TRY ING's 51.50 forecast allows for further depreciation while investors continue to earn interest on Lira holdings. Faster cuts or renewed financial stress could upset that balance by reducing the return investors receive for accepting currency risk.
The next decision is 10 December. ING's remaining 100-basis-point cut depends on inflation giving policymakers room to proceed; Thursday's reduction does not commit them to that outcome.
The central bank expressly retained the option to reverse course: "In case of a significant and persistent deterioration in the inflation outlook, monetary policy stance will be tightened."