Türkiye: Dissecting FX supply-demand dynamics

Research evidence excerpt

Türkiye: Dissecting FX supply-demand dynamics

Fatih Akcelik (44 20) 3493 7285 Europe Economic Research J P M O R G A Nfatih.akcelik@jpmorgan.com

J.P. Morgan Securities plc 30 July 2026

Türkiye: Dissecting FX energy demand at its seasonal trough, while decelerating

domestic demand and cooling credit growth should limit the

supply-demand dynamics risk that real appreciation triggers a surge in imports (Figure

2). Moreover, Türkiye’s external debt repayments (aggregate

• Although external financing needs are approaching of Treasury, financials, and corporates) are also light over the

levels comparable to prior FX stress periods, we view period from July to October 2026 (Figure 3). As a result, we

the FX regime as sustainable in the near term see no pressure on FX reserves from BoP dynamics until

• Gross reserves, at $163bn (including gold), are a November.

strong buffer against an external financing gap of

Figure 2: Monthly current account deficit forecast $21bn over the next 12 months

• In addition, we expect dollarization by residents to $bn

remain contained for now 6

The cornerstone of the disinflation program launched in 2H23

has been the real appreciation of the Turkish lira. As the cur-

-3

rent account deficit (CAD) subsequently widened, market

-6

participants have, over the course of this year, increasingly

-9

questioned the sustainability of the prevailing FX regime.

-12

Türkiye’s basic balance – which we define as current account Jun-26 Sep-26 Dec-26 Mar-27 Jun-27 Sep-27 Dec-27

deficit plus net errors and omissions outflows, less net FDI – Source:CBRT, J.P. Morgan

widened to -4% of GDP, thereby approaching the levels

observed during previous currency stress periods (Figure 1). Figure 3: Monthly External Debt Repayment Projections (Principal+Interest)