The Turkish Lira is the official currency of Turkey and Turkish Republic of Northern Cyprus. It’s divided into subunits called kurus with each kurus equivalent to one Lira.
Banknotes in Turkey feature the portrait of Mustafa Kemal Ataturk, founder of modern Turkey and its first President who is widely considered one of the greatest leaders of the 20th century. Tulay Lale designed the symbol representing their currency lira as half an anchor with two upward lines.
Currency Symbol
Turkey uses the lira as its official currency, divided into subunits called kurus that equal 100 liras each. As its symbol it bears an anchor with upward lines selected after winning a national competition held in 2012.
A weaker Turkish Lira makes it more expensive for businesses and households to pay foreign debt and import goods, straining both businesses and households alike. Furthermore, capital flows in and out of Turkey could disrupt its stability resulting in further decline of its currency.
Exchange Rates
The decline of Turkey’s lira can be attributed to numerous factors, including: -A global economic slowdown that reduces exports and tourism demand, leading to lower foreign currency inflows for Turkey; high inflation that makes imported goods and services more costly for consumers, further diminishing purchasing power; rising interest rates in developed economies that drive investors out of emerging markets, exacerbating capital flight and further weakening the lira; as well as sky-high interest rates driving investors out altogether, compounding capital flight and further weakening it further than ever before!
Turkey’s central bank has taken steps to stem a slide in the lira by cutting interest rates and selling off foreign-currency reserves; but these moves have failed to stabilize the currency, and it continues to lose ground against the dollar.
Investors are worried that Turkey’s planned 49% increase in the net minimum wage may trigger inflation and add further instability to its currency, the lira. Furthermore, debt in foreign currency now exceeds 55% of GDP which raises risks of default should further value be lost from its currency.
Currency Controls
The Turkish lira’s sharp decline has coincided with political changes within Turkey, such as new cabinet members being appointed and amendments made to central bank laws in June, an impasse between Turkey and the U.S. regarding detention of American pastor Andrew Brunson and rising interest rates, plus speculation of possible balance of payments crisis for Turkey.
Investors are exiting Turkey for safer assets, sending its black market rate spiraling over 30 to one, which has caused sharp price increases across a host of products, from food to cars and rent.
Usta Demiralp, aged 63, finds herself struggling to meet household expenses. “My rental prices doubled this year and I can’t afford to move out,” she notes. She has found work selling cash registry machines but this alone doesn’t cover both her retirement pensions and those of her husband – prompting her to purchase goods in dollars rather than Turkish Liras.
Inflation
The Turkish Lira is the official currency of Turkey and Northern Cyprus, divided into subunits called Kurus – 100 of these make one Lira. Banknotes bearing his image feature Mustafa Kemal Ataturk who founded modern Turkey from October 1923 until November 1938 as its first President, considered one of the greatest leaders of all time.
In December 2003, the Grand National Assembly passed a law authorizing redenomination, eliminating six zeroes from old currency and creating a new lira that entered circulation on January 1st 2005 at an exchange rate of 1 new lira = 1,000,000 old liras.
Tulay Lale created the new currency symbol of the Turkish Lira to represent its rising prestige: a half anchor with two upward-pointing lines that reflect on its rise in value. Real lira notes also feature security features like holographic foil strips and fibers which fluoresce blue or red when held up to light.
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