While the US Federal Reserve’s (Fed) 25 basis point interest rate increase opens the door to a new era in global markets, the possible repercussions of the decision on Türkiye are also being closely monitored. The Fed’s re-tightening process, the strengthening of the dollar and high US bond yields mean that financing conditions are becoming more difficult, especially for developing economies. For Türkiye, energy prices are also added to the table. When oil remains at high levels, the global appreciation of the dollar and Türkiye’s dependence on energy imports come together, a new pressure area is created, ranging from exchange rate to inflation.
DOLLAR PRINTING
While investors’ focus on US bonds puts pressure on developing country currencies, the Turkish lira is also affected by this movement. According to analysts, the possible increase in the exchange rate will not be limited only to the foreign exchange market. Since a significant portion of the energy, intermediate goods, machinery and raw materials that Türkiye uses in production are imported, the increase in foreign exchange will be reflected in company costs in a short time. According to experts, this situation is among the issues that may complicate the decline in inflation.
OIL EFFECT
The second important risk for Türkiye emerges on the energy front. Since oil and natural gas are priced in dollars, the strong dollar increases costs even more in periods when energy prices are high. The spread of the increase in oil prices to a wide range of areas, from transportation to agriculture, from industry to food, is interpreted as a second pressure in terms of inflation.
The high course of oil prices increases the risk on inflation and the CBRT’s interest area.
INTEREST AREA IS SHINING
The new global picture points to a process that will be carefully monitored for the Central Bank. Although interest rate cuts are expected to continue as inflation declines in Türkiye, the possibility that the Fed’s re-tightening may narrow this area stands out. According to experts, not only the inflation figures announced internally, but also the steps the Fed will take, the course of the dollar and oil prices will be decisive in interest rate decisions in the coming period.
DEBT LOAD RISK
Economics Expert Economist Barlas Yurtsever pointed out that global interest rate increases create new risks, especially over the debt burden, and brought the following evaluations to the agenda: “The most powerful countries of the world economy are now worried about the interest rate at which they will convert this debt, rather than the debt itself. The annual interest paid by OECD countries alone for their public debts in 2025 reached approximately $2 trillion. While the US federal debt exceeds $40 trillion, annual net interest expense has reached the $1 trillion mark. “When US bond interest rates rise, not only Washington’s budget but also the financing costs of developing countries rise.”
INTEREST EXPENDITURES 2.7 TRILLION TL
“France’s interest expenses are expected to increase by approximately 25 percent and reach 65 billion euros in 2026, while the UK’s 10-year bond interest has reached the highest level in 19 years with 5.38 percent. Türkiye’s public debt to national income ratio is lower than many OECD countries, but high nominal interest, maturity of debt and foreign currency liabilities pose significant risks. Interest expenses are predicted to be approximately 2.74 trillion TL in the 2026 budget. “If global interest rates remain high, it may make Türkiye’s Eurobond cost, banks’ external financing and companies’ borrowing conditions difficult.”
ORIENTATION INCREASES
Touching on the possibilities after the Fed’s decision, Corporate Economics Expert Gülsev Duran says, “The rise in US bond interest rates may accelerate the global capital’s shift towards American assets where it can obtain higher returns with lower risk. In this case, capital outflow from developing countries may be seen. For Turkey, maintaining real returns becomes more important in order to attract foreign investors.”
