Turks adjust to new currency
ISTANBUL — They had months to prepare, and yet it still came as a shock: On New Year's Day, miillions of Turks lost millions. No one, mind you, is any poorer. Rather, Jan. 1 marked the debut of a new currency, a slimmed-down version of the Turkish lira that Turkey's government hopes will set the country on a path of international respect and economic stability.
Called the New Turkish Lira, or YTL, the currency chops the last six zeros off the old lira, bringing the exchange rate to the dollar, for example, from 1,300,000 lira to a more manageable 1.3 YTL. Gone now are the days when tourists became instant multimillionaires upon arrival, when rents would be paid in the billions, and the gross national product was a figure given as more than 400,000,000,000,000,000 - as in 400 quadrillion lira.
"We've been used to big numbers since we were born. Now it's going to be easier," says Cemal Ozen, owner of a hosiery business. "Before we could only buy a little with a lot of money. Now we'll be able to buy a lot with a small amount."
Trimming the lira had long been discussed, but it became a reality only in the past two years, when the country's chronic runaway inflation was finally tamed.
After hovering in the triple digits during the mid-1990s, Turkey's rate of inflation now stands at just under 10 percent, with the government aiming to lower it even further. The decrease, which has been accompanied by a strong surge in the Turkish economy, is due in part to major economic reforms - particularly in the banking sector - instituted by the government, says Mehmet Simsek, an analyst with Merrill Lynch in London. "It looks like rampant inflation is a thing of the past," he says.
With their old liras also a thing of the past (although they will still be legal tender for another year), Turks now have to get used to life without all the zeros. The new currency was designed to minimize confusion: YTL bills mirror their predecessors, only with six digits missing. The new 20 YTL bill, has the same green color and portrait of Mustafa Kemal Ataturk, founder of modern Turkey, on the front.
Standing behind bulletproof glass in a small money-changing office off a busy pedestrian boulevard, Ersin Kurk says his day has been filled with people coming in eager to exchange their old liras for new ones.
For many Turks, the new currency brings the hope of a sense of economic normalcy, an end to the country's cycle of booms and busts, and perhaps a greater sense of stability.
"I think people will start saving their money in Turkish lira, taking out loans in lira," say Ramazan Ozdemir, a grocery store owner. "Now people will be able to see the value of the Turkish lira, while the dollar is dropping."
The country's leaders, meanwhile, hope the new lira will announce the arrival of Turkey as an international economic player, or at least a place where foreign companies can invest without their accountants drowning in a sea of zeros.
"With the YTL, our currency's longing for prestige is coming to an end," Turkish Prime Minister Recep Tayyip Erdogan said at ceremony to unveil the new banknotes.
Behind this all, of course, is also Turkey's continuing push to become a member of the European Union (EU). Taking the bloat out of the lira could be seen as one of the most vivid examples that Turkey is on its way to becoming part of Europe.
"We're now back in the realm of European currencies," says Phillip Rosenblatt, a finance lawyer who runs an Istanbul-based consultancy. "I can't imagine a country with a million zeros being a member of the EU. It's kind of like shedding an old skin."