Turkish Lira Gains Ground in International Trade, Hits Record Volumes
Ankara, July 2025– The international use of the Turkish Lira (TL) is showing significant momentum, with trade conducted in the local currency reaching a record high of 700 billion TL in the first half of 2024. This surge highlights growing acceptance of the TL in cross-border transactions, a key goal of Turkish economic authorities.
According to the latest data:
Exports in TL: 162.3 billion TL
Imports in TL: 535.8 billion TL
Total Trade Volume in TL: 700 billion TL (Jan-Jun 2024)
The trend accelerated notably in June, with 29,291 Turkish companies conducting exports in Lira to 164 countries, demonstrating widespread participation beyond large corporations.
International Perspectives on the TL's Rising Role
This shift towards Lira-denominated trade is drawing attention from global financial institutions and analysts:
Institute of International Finance (IIF): "The record volume is a tangible indicator of the TL's increasing convertibility in trade finance. While driven partly by regulatory encouragement and specific bilateral arrangements, it reflects a genuine, albeit still developing, market acceptance. Sustaining this requires continued focus on price stability and deepening FX markets." (Source: IIF Emerging Markets Brief, July 2025)
J.P. Morgan Emerging Markets Research: "The 700 billion TL figure is impressive growth. This reduces immediate demand for FX for these transactions, easing some pressure on reserves. However, the dominance of imports in the total highlights the challenge: exporters receiving FX still need avenues to hedge or convert efficiently. Long-term success hinges on building deeper and more liquid hedging instruments for the TL." (Source: J.P. Morgan EMEA Currency Outlook, Q3 2025)
Capital Economics: "Turkey's push for Lira trade is part of a broader de-dollarization strategy seen in several emerging markets. The H1 numbers show significant traction, especially on the import side. While it mitigates some FX risks for importers, the volatility of the TL itself remains a key hurdle for wider international adoption as a pricing or reserve currency. The sheer number of firms involved in June is a positive signal of broadening participation." (Source: Capital Economics Emerging Europe Update, July 2025)
Reuters / International Economic Analysis: "The record TL trade volume signals Ankara's policy to promote the currency is gaining real-world traction. While primarily benefiting Turkish importers by shielding them from direct FX fluctuations on those contracts, the next step is encouraging more exporters to willingly accept TL, which requires greater confidence in the currency's stability and convertibility." (Synthesis of reporting from major financial newswires)
Significance and Outlook
The record-breaking volume of trade conducted in Turkish Lira marks a significant milestone in the country's efforts to enhance its currency's international standing. It reduces direct FX conversion needs for a substantial portion of trade flows and fosters the development of TL-based financial products.
Challenges Remain: Analysts universally point out that for the TL's international role to solidify further, deeper and more liquid hedging markets are essential to manage currency risk. Additionally, sustained macroeconomic stability and lower inflation are critical for building long-term confidence in the Lira beyond regulated trade channels.
Despite these challenges, the H1 2025 data provides clear evidence that the Turkish Lira is becoming a more established player in international trade settlements, moving beyond symbolic use towards meaningful volume.
Is the Turkish Lira Becoming a Trade Currency?
Expert Commentary by Muhittin Çiftçi – Global Currency Brief
1. Strategic Progress, Structural Challenges
Over 29,000 firms are now engaging in TRY-based trade, a result of strategic partnerships with countries such as Russia, China, and Gulf states. However, macroeconomic vulnerabilities persist, particularly regarding inflation and market depth.
2. Trade Imbalance: The Double-Edged Sword
In 2024, imports in TRY amounted to 535.8 billion while exports were just 162.3 billion. Importers benefit from exchange rate protection, but exporters face the risk of TRY depreciation and must either hedge or seek government incentives.
3. Impact on FX Markets
TRY trade provides short-term relief by reducing immediate FX demand. However, the chronic current account deficit remains, especially due to energy and key material imports still priced in USD/EUR.
4. Key Constraints
TRY suffers from limited global hedging tools, historical volatility, and low liquidity compared to USD, EUR, and CNY. These factors discourage foreign investors and partners from using TRY in larger or long-term contracts.
5. Regional Role and Long-Term Vision
TRY offers an alternative settlement currency for countries under Western sanctions like Russia. However, without reforms such as stable single-digit inflation and an independent monetary policy, its ambition to become a regional reserve currency is not realistic.
Conclusion & Outlook
TRY’s use in trade, particularly imports, is growing. Yet, full internationalization requires:
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Robust financial tools for hedging
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Macroeconomic stability
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Exporter incentives
Key indicators to watch include TRY adoption by exporters and the expansion of swap lines.
