Uzbekistan's som has been on a long depreciation trend against the US dollar, and investors moving capital from Tashkent into Turkish real estate face a recurring question: when is the right moment to convert, and how much currency risk should be carried once the funds arrive. Türkiye adds its own layer of volatility on top, since the lira has its own inflation and rate cycle. For an Uzbek investor, this is a two-currency problem, not a one-currency problem, and it deserves a deliberate plan rather than a single conversion decision made on the day of transfer.
Why the Som-Lira Path Is Different From a Dollar-Lira Path
Most currency-hedging guidance written for Western investors assumes a single conversion: home currency into lira. Uzbek capital typically routes through a second step, som into US dollars, dollars into lira, because direct som-lira liquidity is thin and pricing is unfavorable. That means an Uzbek buyer is exposed to two independent currency movements between the decision to invest and the day funds actually settle in Türkiye. Treating this as one FX event understates the risk. Each leg should be planned and timed on its own terms, and holding funds in USD as an intermediate step, rather than converting immediately to lira, is often the more disciplined approach.
Timing the Conversion Into Lira
Türkiye's central bank has pursued a tighter monetary policy stance in recent cycles, which has at times supported the lira's carry appeal but has not eliminated its long-run depreciation tendency. The practical implication for an Uzbek investor is that converting the full purchase amount into lira far in advance of closing exposes capital to unnecessary lira depreciation risk with no offsetting benefit, since the funds are sitting idle rather than earning a return. Conversely, converting too close to closing leaves no buffer if a payment schedule slips. A middle path many experienced buyers use is staged conversion: moving funds into lira in tranches tied to actual payment milestones in the purchase or construction agreement, rather than a single lump-sum conversion at the outset.
Payment schedule alignment : Off-plan and staged-construction purchases in Türkiye typically involve payments tied to construction milestones. Aligning currency conversion to those milestones, rather than converting the entire contract value upfront, reduces the amount of lira-denominated capital sitting exposed at any given time.
Hedging Tools Available to Foreign Investors
Forward contracts and non-deliverable forwards on the lira are available through international banks and some Turkish institutions, though liquidity and pricing for retail-sized real estate transactions are less favorable than for institutional flows. For most individual investors, formal hedging instruments are less practical than structural discipline: holding reserve capital in a stable currency, converting only what is needed for near-term obligations, and building a rental income assumption that accounts for lira volatility rather than assuming a fixed dollar-equivalent yield. Investors with larger portfolios or multiple properties may find it worthwhile to work with a Turkish-licensed financial advisor on forward cover for larger tranches, but this should be evaluated case by case against transaction size.
Rental Income and the Ongoing Exposure
Currency risk does not end at purchase. Rental income in Türkiye is typically collected in lira, even where lease agreements reference a foreign-currency benchmark, and that income needs to be converted back to a reference currency for the investor to track real returns. Uzbek investors should model rental yield in lira terms first, then apply a conservative depreciation assumption when converting projected returns back to som or dollars, rather than relying on the nominal lira yield figure alone. This is particularly relevant for Istanbul and coastal-city rental properties, where lira rents have historically lagged actual currency depreciation, narrowing real dollar-equivalent yield even when headline lira rental growth looks strong.
A Practical Framework
The core discipline is straightforward: separate the som-to-dollar decision from the dollar-to-lira decision, stage lira conversion against actual payment obligations rather than converting in bulk, and build ongoing rental income projections around lira exposure rather than assuming currency stability. None of this eliminates currency risk entirely, but it converts an unmanaged exposure into a planned one, which is the more durable position for any cross-border property investment between Uzbekistan and Türkiye.
For Uzbek investors weighing entry timing, structuring a staged conversion plan alongside the purchase agreement is worth doing before funds move, not after.