How does the lira to dollar rate affect import and export businesses in Turkey?

Summary: How the Turkish Lira to US Dollar Rate Reshapes International Trade for Turkish Businesses

If you’re running an import-export business in Turkey, the lira-to-dollar exchange rate isn't just some abstract metric on a finance website—it’s the invisible hand that can quietly boost your profits, or leave you staring down losses you didn’t see coming. In this piece, I’ll walk you through how shifts in the TRY/USD rate ripple through Turkish companies, what tends to go wrong (and right), and sprinkle in some real-world stories and expert takes. We'll also look at trade verification standards between countries—because, spoiler alert, complying with global rules isn’t as straightforward as some guides make it sound.

Why Exchange Rates Aren’t Just for Bankers: My Wake-Up Call

Years ago, when I helped a friend set up a textile export business in Istanbul, we were laser-focused on logistics, suppliers, convincing buyers in Germany, and getting the right certifications. Exchange rates? We assumed they’d “sort themselves out”. That changed fast: a sudden lira depreciation sent our projected profits into a tailspin, since our material costs were in USD, but our contracts were in lira.

That shock taught me to track the TRY/USD rate like a hawk—and, more importantly, to understand how those numbers drive daily decisions for Turkish businesses trading across borders.

How the Lira/Dollar Rate Hits Turkish Importers and Exporters

Step 1: Importers—The Pain of a Weak Lira

Let’s say you’re importing electronics from the US. You’ve negotiated a deal at $100,000. If 1 USD = 20 TRY, you owe your supplier 2,000,000 TRY. But if the lira weakens overnight to 1 USD = 25 TRY, suddenly that same shipment costs you 2,500,000 TRY. That’s a 25% cost jump for no change in what you’re actually buying!

I remember a warehouse manager in Ankara showing me his invoices—he’d seen his margins vanish in a month just because of the lira’s slide. No price increase from the supplier, just pure currency risk. According to a 2023 OECD report, Turkish importers have been facing persistent cost pressures due to currency volatility, often forcing them to pass on costs to consumers or cut back on purchases.

Step 2: Exporters—The Silver Lining (Sometimes)

On the flip side, Turkish exporters can benefit from a weaker lira. Imagine you’re shipping furniture to the US: you sell a container for $50,000. When the lira is weak, you get more TRY for every dollar earned—great for local expenses. I’ve seen companies in Bursa expand production after a lira fall, because their goods suddenly became more competitive abroad, and their revenue ballooned in TRY terms.

But, and this is crucial, most Turkish exporters also rely on imported raw materials (wood, metal fittings, fabrics). If those are priced in dollars, the cost side can balloon as fast as the revenue side, squeezing profits. So it’s not as simple as “weak lira = export boom” unless you’re sourcing locally.

Step 3: The Hedging Game (Or, How We Tried and Failed to Outsmart the Market)

After our early currency shocks, we tried hedging—using forward contracts to lock in exchange rates. It’s a tool many large Turkish importers and exporters use, but for small businesses, the process can be daunting and sometimes backfires if the rate moves in your favor instead.

The Istanbul Chamber of Commerce has guides on hedging, but real-world execution often means working with banks, negotiating fees, and sometimes, just crossing your fingers and hoping for the best.

Source: XE Currency Charts

Real-World Example: A Turkish Machinery Exporter Faces the Music

Take the story of “Aydın Makina”, a medium-sized machine parts exporter in Konya. In 2022, the lira dropped from 14 to 18 per USD in a few months. Their US clients paid in dollars, so revenue in TRY jumped, letting them pay workers more and invest in new equipment. But their imported steel, also priced in USD, nearly doubled in lira cost.

The owner told Bloomberg that they had to renegotiate contracts and even delay some shipments. It was a classic case: currency swings helping on paper, but real profits squeezed by higher input costs.

How Trade Verification and International Standards Complicate Things

Now, let’s add another layer: "verified trade." When you’re exporting, buyers (especially in the US or EU) often require documentation proving the goods meet certain standards. And, as I learned the hard way, every country has a slightly different definition.

Comparison Table: "Verified Trade" Standards (Turkey, US, EU, China)

For Turkish exporters, meeting the right verification standard can mean the difference between clearing customs in Rotterdam or having your shipment stuck at the port. According to the WTO Technical Barriers to Trade Agreement, harmonization is encouraged, but in practice, differences persist—especially in documentation and testing requirements.

Case Study: Turkish Ceramics to the US—A Verification Saga

A friend of mine, Cem, runs a ceramics workshop in Kütahya. When he started exporting to the US, he thought his TSE certificate would be enough. But US buyers demanded ASTM and C-TPAT documentation, which meant fresh lab tests, factory audits, and reams of paperwork. The dollar payments were great, but the costs (in both USD and stress) were higher than expected.

Cem’s story is typical: currency gains can be wiped out if you misjudge compliance costs. Industry expert Ayşe Kılıç from the Turkish Exporters Assembly puts it bluntly: “Ignoring or underestimating international verification standards is like gambling with your business reputation—and profit margins.”

Practical Steps: What I Learned (Sometimes the Hard Way)

1. Track the Exchange Rate Daily: Use reliable sources like TCMB (Turkey’s central bank) or financial platforms. Even a small shift can mean a big difference in costs.
   Source: TCMB official site
2. Negotiate Contracts in Stable Currencies: Where possible, fix prices in USD or EUR to avoid lira swings. But don’t forget—buyers may also try to push currency risk onto you.
3. Hedge If You Can, But Be Realistic: Forwards and options can help, but make sure you understand the costs and risks. I’ve gotten burned by over-hedging when the rate moved in my favor.
4. Keep a Buffer for Compliance Costs: Always budget extra for certification, lab tests, and surprise paperwork.
5. Lean on Local Chambers and Trade Groups: The Turkish Exporters Assembly and your sector’s trade association are goldmines for practical advice and support.

Conclusion: Exchange Rates, Verification, and the Messy Reality

To wrap it up: the lira-to-dollar exchange rate is more than a number—it’s the daily reality for Turkish importers and exporters. A weaker lira makes exports look attractive, but also raises input and compliance costs. International trade verification isn’t just box-ticking; it’s a complex, country-specific process that can trip up even experienced businesses.

My biggest takeaway? Don’t just hope for a favorable exchange rate or assume your local certificates will fly abroad. Build in buffers, stay informed, and—if you’re anything like me—learn to laugh when things go sideways. If you’re considering cross-border trade from Turkey, start with the basics: track your currency risk, get those certificates in order, and connect with local experts before you ship a single box.

For next steps, I’d suggest: sign up for TCMB exchange rate alerts, join a sector-specific exporters’ WhatsApp group (yes, they exist and are super helpful), and, above all, never underestimate the paperwork. If in doubt, ask someone who’s already made (and survived) the mistakes.

Author: Aydın Demir, 10+ years in international trade consulting, former exporter, and frequent contributor to Turkish business forums. Sources: OECD, WTO, Bloomberg