What you will learn in this lesson
In this lesson, part of the Sahmino Academy series, you will learn how Turkey's central bank manages inflation and interest rates, why a high interest rate does not always stop a currency from falling, and how this same mechanism reaches Iranian decisions through three channels: buying property, cross-border trade, and money transfers.
Definitions
The Turkish lira is Turkey's official currency, traded internationally under the ticker TRY.
The Central Bank of the Republic of Turkey (TCMB) is Turkey's monetary policy authority, the counterpart of Iran's central bank or the US Federal Reserve.
The policy rate is the rate at which a central bank lends to banks short term, and it anchors every other interest rate in the economy. In Turkey it is known as the one-week repo rate.
The real interest rate is the nominal interest rate minus the inflation rate. When this number is positive, holding that currency is profitable in purchasing-power terms.
Citizenship by investment is a legal path in which a qualifying purchase or investment of a set value entitles a foreign national to apply for that country's citizenship.
The mechanism: from Ankara's decision to the lira's rate
Turkey has struggled with high inflation for years. At its meeting on July 23, 2026, the central bank held its policy rate at 37 percent for the fourth straight meeting. According to Turkey's official statistics agency, annual inflation eased to 31.75 percent in July 2026, down from 32.11 percent in June. That means the policy rate now sits above the inflation rate, so Turkey's real interest rate has turned positive.
The logic is simple: when a central bank keeps its policy rate high, holding lira deposits becomes more attractive, which can slow further currency depreciation. But a high rate alone does not guarantee the currency will hold; political risk, the trade deficit, and inflation expectations all shape investor decisions too. That is why, despite the 37 percent rate, the lira kept setting fresh record lows in recent weeks, crossing 47.75 lira per dollar on August 12, 2026 (Sahmino carries the live dollar-to-lira rate daily).
A weaker lira raises import costs for everything Turkey buys in foreign currency, from energy to raw materials, which itself feeds inflation. That is why the central bank's own statement said rates would stay restrictive until price stability is achieved.
A numeric example: suppose
Suppose you want to convert the cost of a 2,000,000-lira property in Istanbul into tomans. Based on Sahmino's live data on August 17, 2026, one Turkish lira was worth roughly 3,890 tomans, putting the toman cost of this property at about 7.78 billion tomans.
Now suppose the toman-to-dollar rate stayed roughly flat over the past three months, while the lira, as shown above, fell from about 45.5 per dollar in mid-May to about 47.9 per dollar today. Three months ago, one lira was worth roughly 4,090 tomans, so the same 2,000,000-lira property would have cost about 8.18 billion tomans. In other words, without any change in the toman price of the dollar inside Iran, the same property became about 5 percent cheaper for an Iranian buyer, purely because the lira weakened against the dollar. This is exactly the mechanism that turns a falling lira from bad news into a pricing opportunity for some Iranian buyers and travelers, regardless of whether buying property is itself the right decision.
Transmission channel: how this reaches Iran's market
Property and citizenship. Under Turkish Citizenship Law No. 5901, a foreign national who buys property worth at least 400,000 dollars and holds it for at least three years can apply for Turkish citizenship. This threshold is a well-known route for Iranians seeking to preserve asset value or gain an alternative residence. As the example above shows, a weaker lira against the dollar lowers the toman cost of lira-priced Turkish property for Iranian buyers (as opposed to dollar-priced property), even though the 400,000-dollar threshold for the citizenship route itself is fixed in dollars.
Trade and the border corridor. Turkey is one of Iran's main trade routes to the world. The head of the transportation and logistics committee at the Tehran Chamber of Commerce said on July 27, 2026 that with alternative routes now active, part of Iran's cargo moves through Turkey, Pakistan, China, and Eurasian countries. A weaker lira makes goods priced in lira by Turkish exporters more competitive in export markets, including Iran; conversely, it raises the cost of imported goods for Turkish importers.
Transfers and currency movement. Istanbul's exchange market is a well-known destination for Iranian money transfers, similar to Dubai's role for the UAE dirham. The key difference is that the dirham has been pegged at a nearly fixed rate to the dollar for close to three decades, while the lira floats and moves against the dollar daily. That means the timing of converting tomans into lira, unlike converting into dirhams, is itself a variable with real financial consequences.
Common mistakes
- Assuming Turkey's high policy rate (37 percent) by itself means the lira will stop falling; the interest rate is only one of several factors that shape a currency's rate.
- Directly comparing the lira's decline with the dollar's rise inside Iran; the two markets move independently, so both rates (toman to dollar, and dollar to lira) need to be checked separately.
- Assuming the 400,000-dollar property threshold for citizenship is fixed forever; it was previously 250,000 dollars and can change again with a decision by the Turkish government.
Summary
Unlike the UAE dirham, the Turkish lira is a floating currency whose rate against the dollar moves every day; a high policy rate from Turkey's central bank can slow that decline but cannot stop it on its own. This same volatility reaches Iranian financial decisions directly, through property purchases, cross-border trade, and currency transfers, not as an abstract number in the news, but as a real difference in the toman cost of a property or a shipment of goods.
Read the previous lesson in this series: The UAE Dirham: Trade and Remittance Gateway.
