How does the dollar rate affect the stock market?
The exchange rate affects the market through two separate channels: companies' real profitability, and the unit of measure itself. Confusing the two is the most common mistake.
The unit-of-measure effect
When the lira weakens, lira prices are expected to rise even if nothing else changes. This shows up as the index going up, while the companies' dollar value has stayed flat. The dollar chart zeroes out this effect.
The real profitability effect
A currency move does not hit every company the same way. For exporters a weak lira means higher revenue. For companies buying inputs in dollars or carrying foreign-currency debt, the same move raises costs and debt burden. This is why companies separate out so visibly on dollar charts.
How to tell them apart
If a stock's dollar chart is rising, the gain is real and independent of the currency. If it rises in lira while falling in dollars, the source of the rise is the unit of measure. Applying the same test to the whole index shows whether the market has actually grown or only nominally.
Both effects on the index
Over the past year the BIST 100 moved +2.7% in lira and -13.3% in dollars. The index's dollar peak was $338.59 on 22 Jul 2024; today it sits 33.8% below that level.
The figures in this section come from live data.
BIST 100 index chart in dollarsWhy does the market rise when the exchange rate rises?
Largely the unit-of-measure effect: the same companies are worth more lira. Viewed in dollars, most of that rise disappears.
Which companies benefit from a weak lira?
Exporters earning in foreign currency with mostly lira costs generally benefit. Companies with heavy foreign-currency debt or imported inputs are hurt.
The example figures in these guides update automatically with the end-of-day close. Not investment advice.