Can the fall of the lira exchange rate affect trade between Azerbaijan and Turkey?

The Turkish lira exchange rate against the US dollar has reached a record low.

According to Bloomberg, to support the national currency, Ankara sold US Treasury bonds worth approximately $14 billion, reducing its portfolio to $1.6 billion. Earlier, a portion of the country's gold reserves was also put up for sale for the same purpose.

Against this backdrop, the Central Bank of Turkey in May raised its inflation forecast for 2026 from 16% to 24%. It should be noted that Turkey is one of Azerbaijan's main trading partners.

Economist Khalid Kerimli, commenting on the situation for Baku TV, noted that inflation in Turkey directly affects the cost of goods imported from that country to Azerbaijan. According to him, in this regard, Azerbaijan's inflation also partly stems from price increases in Turkey.

"The situation in Turkey is different now. Previously, the sharp depreciation of the lira allowed Turkish export goods to remain competitive despite high inflation. However, the policy of stimulating exports and domestic production through a weaker lira later led to serious consequences. The multiple declines in the exchange rate within a year scared off investors and triggered large-scale financial speculation. Today, Turkey wants to completely reverse the situation that developed in 2020-2023, that is, to significantly slow down the depreciation of the lira. Of course, an 18% decline in the exchange rate over a year may not seem like a small figure. But let us consider that a few years ago, this depreciation exceeded 150-200% per year," the expert added.

According to the report of the State Customs Committee, in January-April 2026, Azerbaijan's exports to Turkey decreased by 4.9%, while imports from that country fell by 5.7%.