Mahfi Eğilmez Analysis: Lira Bank Deposit or Buying Dollars? 2026 Guide

While the Turkish economy struggles with inflationary challenges and exchange rate fluctuations in mid-2026, Mahfi Eğilmez, a prominent economist and former Undersecretary of the Treasury, analyzed the returns of two popular assets—Lira bank deposits and the dollar—in an analytical note on the T24 website and his personal blog [1][2]. Eğilmez believes that investment decisions should not be based solely on nominal interest rates, but must consider real purchasing power and exchange rate parity.

The Lira vs. Dollar Equation in 2026 According to Eğilmez's analysis, the Central Bank of the Republic of Turkey (TCMB) has stabilized the policy rate at 37% to combat inflation driven by energy costs and regional tensions [3]. In this environment, investors face a dilemma. To clarify the matter, Eğilmez presents a scenario: if an individual deposited 500,000 Lira a year ago at a net interest rate of 36% (after taxes), their assets would have reached 680,000 Lira today [1][4].

At the start of this investment, the dollar rate was 40 Lira, equivalent to $12,500. Today, on July 15, 2026, the dollar rate is approximately 47 Lira. By converting 680,000 Lira to dollars at the current rate, the individual's capital reaches $14,468. This represents a real profit of 15.7% on a dollar scale [2]. In other words, the investor not only gained Lira-based profit but also increased the dollar value of their assets.

The Break-even Point: The 34% Threshold One of the most important parts of Eğilmez's analysis is determining the "break-even point" for choosing between these two paths. He explains that if the net deposit interest rate is 36%, theoretically, the dollar must grow by 36% for the returns on both assets to be equal [1]. However, in the real world, costs such as the bid-ask spread and bank fees exist.

Eğilmez emphasizes that including these costs, the real profitability threshold is around 34% [4]. This means that if you predict the dollar rate will grow by less than 34% in the coming year, Lira deposits are a more logical option. However, if you expect a currency jump exceeding this amount, buying dollars or foreign currency assets will offer more security [2].

Economic Context and Systematic Risks The economist's analysis comes at a time when interest rates in Turkey are at their highest levels in recent years [3]. In its last meeting in June 2026, the Central Bank maintained the interest rate at 37% to defend Lira stability, especially after political fluctuations and high energy costs from regional conflicts increased inflationary pressure [3][5].

Eğilmez warns that relying solely on high interest rates without structural reforms can only attract "hot money" or short-term capital and is not sufficient for long-term sustainability [4]. He advises investors to always include geopolitical risks and sudden changes in monetary policy in their calculations, as in developing economies, financial equations can change within days [1].