Turkish Exporters Gain as Euro/USD Surge
(MENAFN) Turkish exporters are optimistic about the recent rise in the euro/US dollar exchange rate, seeing it as an opportunity to boost their revenues, even as concerns mount over the Federal Reserve's future under President Donald Trump's potential leadership decisions.
Trump is reportedly considering a new nominee to lead the Federal Reserve in either September or October. This has heightened speculation that the Fed may lower interest rates three more times before the year ends, which in turn helped drive the euro/US dollar exchange rate to 1.1745—its highest level in nearly four years—before stabilizing at 1.1730.
The weakened US dollar reflects investor reactions to Trump’s decisions, prompting many to offload dollar-denominated assets. The US Dollar Index, which measures the dollar's performance against a basket of currencies, dipped to 97.076 on Thursday, marking its lowest point since March 2022.
Tonguc Erbas, General Manager of Ahlatci Portfoy, a financial services firm based in Turkey, told media that the euro/US dollar exchange rate surge is proving advantageous for Turkish exporters. He also attributed the increase to the European Central Bank (ECB)'s firm monetary policies, aimed at reducing inflation across the Eurozone to 2%.
Erbas explained that the ECB is slowly relaxing its policies to stabilize the EU economy, and with limited concerns over tariffs, market confidence has been bolstered. However, he cautioned that although the euro's rise benefits Turkish exporters, there are still risks, especially concerning imports.
Erbas continued, "The rise in the euro/US dollar exchange may have been positive for Turkish exporters because half of Türkiye’s exports go to Europe, but most of our imports are dollar-based." "The rise in the exchange rate is allowing euro-based revenue to increase when converted to Turkish lira."
Erbas also pointed out that the Turkish industrial sector stands to gain significantly from the favorable exchange rate, although the risks tied to fluctuations in the cost of imports must be closely monitored.
According to the Turkish Exporters’ Assembly (TIM), Türkiye’s exports for the January-May period totaled $110.9 billion, with 39% of that value—about $43.2 billion—going to the EU. This represents a 7.5% increase over the same period in 2024.
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