Commerzbank: Rising Inflation Expectations Pressure Turkish Lira

Commerzbank's Tatha Ghose highlights that market-based inflation expectations in Turkey have increased once more, both for the 12-month horizon and for 2026. This development erodes confidence in the Turkish Lira.

The analyst points out that persistent upward revisions to inflation expectations keep pressure on the currency, as markets price in a prolonged period of elevated price growth. The data suggests that the central bank's tightening measures have yet to convincingly anchor expectations.

With inflation expectations remaining sticky, the Turkish Lira faces continued headwinds. Commerzbank's assessment underscores the challenge for policymakers in restoring credibility and stabilizing the currency.