Turkish Exporters Welcome Euro Surge
(MENAFN) Turkish exporters regard the recent increase in the euro/US dollar exchange rate as a potentially favorable shift, while lingering doubts about the Federal Reserve's autonomy are raising apprehensions.
US President Donald Trump is reportedly evaluating potential replacements for the head of the Federal Reserve, with a decision anticipated around September or October.
Expectations for the Fed to implement three interest rate reductions by year-end have strengthened, pushing the euro/US dollar rate to 1.1745—its highest in nearly four years—before settling at 1.1730.
The weakening of the US dollar indicates that investors reacted to Trump’s actions by offloading their dollar-denominated assets, leading to a decline in the US Dollar Index, which dropped to 97.076 on Thursday—its lowest point since March 2022.
Tonguc Erbas, the general manager of the Türkiye-based financial institution Ahlatci Portfoy, told a news agency that this exchange rate development has been advantageous for Turkish exporters.
He also highlighted that the European Central Bank (ECB)’s firm monetary policy—intended to bring inflation in the bloc down to 2 percent—has helped push the euro upward.
According to Erbas, the ECB is methodically relaxing its monetary approach to stabilize the EU’s economy, and as concerns over tariffs remain minimal, market sentiment is improving.
On the other hand, the Federal Reserve is proceeding with caution due to discussions suggesting Trump may appoint a “shadow chair” to influence the institution’s direction.
“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,” he explained.
“The rise in the exchange rate is allowing euro-based revenue to increase when converted to Turkish lira.”
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