Lira and CEE FX: Turkish Lira, Zloty, Forint — 2026-10-31
The Turkish lira slid toward 50 per dollar as the Central Bank of the Republic of Türkiye (CBRT) resumed rate cuts, while the Polish zloty faced pressure from a strong dollar post-Fed decision. The Hungarian forint showed volatility, weakening against the dollar before recovering, as the euro hit a two-year low against the greenback.
Lira and CEE FX: Turkish Lira, Zloty, Forint — 2026-10-31
Top developments
Turkey resumes easing, lira under pressure
On October 22, the CBRT cut its one-week repo rate by 100 basis points to 36.0%, marking the first reduction in nine months. This move followed a September CPI print that fell below 30% year-on-year, which analysts at Commerzbank noted created scope for easing despite concerns that disinflation may not be genuine. By October 28, the USD/TRY pair approached 49.85, with eyes on potential further depreciation risks as the easing cycle continues.
Zloty weakens against dollar and euro
The Polish zloty faced significant pressure this week, with USD/PLN rising to attack the 3.96 level and EUR/PLN returning above 4.40 on October 28. While the Fed held rates steady in the 3.75-4.00% range on October 28, the dollar's strength weighed on emerging market currencies. By Friday, October 30, the zloty began to recover some losses as the euro weakened against the dollar, with EUR/PLN settling around 4.39.
Forint volatile amid ECB and Fed decisions
The Hungarian forint experienced mixed trading, initially weakening to its lowest level against the dollar since April before recovering following the Fed's decision. The ECB's October meeting, where it held the deposit rate at 2.50%, contributed to a weaker euro, pushing EUR/USD to a two-year low. By October 30, the forint had strengthened significantly against major currencies, closing the month on a positive note despite a sluggish domestic economic backdrop.
Local view
Turkish media highlighted the CBRT's decision to cut rates after a long pause, with outlets like Sözcü and Bigpara noting the move as the seventh rate decision of the year. In Poland, Comparic and Bankier.pl focused heavily on the zloty's vulnerability to global dollar strength, noting that the currency remained under pressure despite the Fed's hold. Hungarian financial portal Pénzcentrum emphasized the forint's "brutal" strengthening in late October, contrasting it with weak Q3 GDP growth data released earlier in the week.
Context & numbers
- USD/TRY: Approached 49.85 on Oct 28.
- EUR/PLN: Traded above 4.40 in mid-week, settling near 4.3955 on Oct 30.
- USD/PLN: Reached 3.93-3.96 range during the week.
- EUR/HUF: Official MNB rate stood at 365.80 HUF on Oct 30.
- USD/HUF: Official MNB rate stood at 326.64 HUF on Oct 30.
- Fed Policy Rate: Held at 3.75-4.00% on Oct 28.
On the radar
- TCMB Reserves: Local media are monitoring CBRT reserve levels closely, with reports of "sharp drops" linked to FX sales to stabilize the lira.
- Hungarian GDP: The weak Q3 growth figure (0.1%) continues to weigh on forint sentiment, despite recent currency strength.
- Next TCMB Meeting: Investors are waiting for the next Monetary Policy Committee meeting date to gauge the pace of further easing.
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