Lira and CEE FX: Turkish Lira, Zloty, Forint — 2026-09-02

Top developments

CBRT Resumes Weekly Repo Auctions at 37% Policy Rate

On August 23, the Central Bank of the Republic of Türkiye (CBRT) announced the resumption of weekly repo auctions at its 37% policy rate, aiming to normalize funding conditions after regional geopolitical tensions eased. This move is interpreted by local analysts as an "implicit rate cut" of approximately 3 percentage points in effective funding costs, as it replaces more expensive emergency liquidity tools with standard repo operations. The decision has kept the Lira under pressure, with USD/TRY reaching 48.2955 on September 2, reflecting market skepticism about the durability of disinflation.

Hungarian Forint Strengthens on MNB Rate Cut and EU Funds

The Hungarian Forint appreciated significantly against major currencies after the Magyar Nemzeti Bank (MNB) cut its base rate by 25 basis points to 5.50% on August 25. Despite the rate cut, the currency strengthened due to favorable inflation data and news regarding the disbursement of EU funds, which boosted investor confidence. By August 26, the EUR/HUF pair had dropped to near one-month lows, briefly approaching the psychological 360 level before stabilizing around 365.

Polish Zloty Trades Stable Amid Fed Signals

The Polish Zloty held steady against the Euro, trading at approximately 4.33 PLN/EUR according to NBP reference rates from August 28. Local media noted that while the Zloty initially strengthened in late August, it faced slight depreciation pressures as global markets reacted to hawkish signals from the US Federal Reserve. The currency remains sensitive to EUR/USD fluctuations, with the ECB reference rate for August 26 placing the Zloty at 4.2955 per Euro.

Inflation Expectations Outpace CBRT Forecasts

Commerzbank analysts warned that seasonally adjusted price momentum in Turkey remains above 2% month-over-month, suggesting that disinflation is stalling despite the central bank's tightening stance. This divergence between actual inflation dynamics and official forecasts continues to weigh on the Lira, as traders anticipate further managed depreciation rather than a sharp reversal.

Local view

Turkish Media: Sözcü and Halk TV highlighted the CBRT's operational easing as a de facto rate cut, noting that funding costs have effectively dropped from 40% to 37% through the shift in auction mechanisms. Yatirimx reported that USD/TRY hit 48.27 on September 1, driven by global interest rate expectations and domestic growth data.

Hungarian Media: Portfolio.hu described the Forint's movement as "volatile but positive," noting that the currency tested its strength against the Euro after the MNB decision. Economx emphasized that the influx of EU funds was a key driver for the Forint's resilience, preventing a deeper sell-off despite the rate cut.

Context & numbers

• USD/TRY: 48.2955 (Sept 2, 2026)
• EUR/TRY: 55.9373 (Sept 2, 2026)
• EUR/PLN: 4.2955 (ECB Reference Rate, Aug 26, 2026)
• EUR/HUF: 360.18 (ECB Reference Rate, Aug 26, 2026); traded near 365.3 on Aug 31
• MNB Base Rate: 5.50% (post-August 25 cut)
• CBRT Policy Rate: 37.00% (weekly repo auctions resumed)

On the radar

• CBRT PPK Meeting: Markets are awaiting the next Monetary Policy Committee meeting date in September to see if the implicit easing continues or if rates are formally adjusted.
• EU Funds Disbursement: Further tranches of EU funds for Hungary are expected to support the Forint, keeping EUR/HUF volatility contained below 370.
• Fed Hawkishness: Continued strong US economic data could pressure all CEE currencies, particularly the Lira, which is most sensitive to USD strength.