02 January 2005
ANKARA: Turkey ushered in the New Year with a new currency, scrapping the multi-million-lira banknotes that had bewildered tourists and embarrassed government officials and ordinary citizens during decades of chronic hyperinflation. "We are happy that we have given the lira back its credibility," Prime Minister Recep Tayyip Erdogan told reporters as he drew some notes from a cash dispenser after midnight. The New Turkish Lira, known locally by the initials YTL, is worth one million old lira and can be exchanged for 0.74 dollars or 0.55 euros, enabling a foreigner to buy a cup of coffee or bargain for souvenirs without the help of a pocket calculator. But old banknotes, including the 20,000,000-lira bill-the world's largest denomination-will remain legal tender until December 31, 2005, and shopkeepers must display goods at the old as well as the new price until then.
The currency reform was introduced after an economic austerity programme backed by the International Monetary Fund pulled the country out of a recession which had brought it to the brink of economic collapse in 2001. A survey commissioned by the central bank in October indicated that two-thirds of the public believed that currency reform was necessary step and that a quarter thought the new money would be easier to use. But the survey also showed that 56.4 per cent of the interviewees were concerned that at first they would have difficulty in converting old currency values into new. In order to make things as easy as possible, the new notes will be the same colour as the bills they replace. Inflation is currently running at about 10 per cent, its lowest rate for almost 30 years, and Erdogan's government has said it aims to bring it down to four percent by the end of 2007.
The currency reform adds an element of financial seriousness to Turkey's application to join the European Union, while officials hope that the start of negotiations with the EU in October 2005 will further contribute to the country's political stability. The IMF is expected to make $10 billion available to Turkey soon under a new three-year standby agreement. The banks and financial authorities have invested large sums in the currency reform and they expressed satisfaction that the operation went off without a hitch, at least in its initial stage. "The system is working perfectly, better even than we expected," the official in charge of coordinating bank operations, Sertyac Ozinal, told Anatolia news agency after cash dispensers began issuing new notes at midnight. One result will be the return of the kurus, which disappeared from circulation more than two decades ago. There will be 100 kurus to the New Turkish lira, and Turks will for the first time for many years again have to get used to handling coins.
ANKARA: Turkey ushered in the New Year with a new currency, scrapping the multi-million-lira banknotes that had bewildered tourists and embarrassed government officials and ordinary citizens during decades of chronic hyperinflation. "We are happy that we have given the lira back its credibility," Prime Minister Recep Tayyip Erdogan told reporters as he drew some notes from a cash dispenser after midnight. The New Turkish Lira, known locally by the initials YTL, is worth one million old lira and can be exchanged for 0.74 dollars or 0.55 euros, enabling a foreigner to buy a cup of coffee or bargain for souvenirs without the help of a pocket calculator. But old banknotes, including the 20,000,000-lira bill-the world's largest denomination-will remain legal tender until December 31, 2005, and shopkeepers must display goods at the old as well as the new price until then.
The currency reform was introduced after an economic austerity programme backed by the International Monetary Fund pulled the country out of a recession which had brought it to the brink of economic collapse in 2001. A survey commissioned by the central bank in October indicated that two-thirds of the public believed that currency reform was necessary step and that a quarter thought the new money would be easier to use. But the survey also showed that 56.4 per cent of the interviewees were concerned that at first they would have difficulty in converting old currency values into new. In order to make things as easy as possible, the new notes will be the same colour as the bills they replace. Inflation is currently running at about 10 per cent, its lowest rate for almost 30 years, and Erdogan's government has said it aims to bring it down to four percent by the end of 2007.
The currency reform adds an element of financial seriousness to Turkey's application to join the European Union, while officials hope that the start of negotiations with the EU in October 2005 will further contribute to the country's political stability. The IMF is expected to make $10 billion available to Turkey soon under a new three-year standby agreement. The banks and financial authorities have invested large sums in the currency reform and they expressed satisfaction that the operation went off without a hitch, at least in its initial stage. "The system is working perfectly, better even than we expected," the official in charge of coordinating bank operations, Sertyac Ozinal, told Anatolia news agency after cash dispensers began issuing new notes at midnight. One result will be the return of the kurus, which disappeared from circulation more than two decades ago. There will be 100 kurus to the New Turkish lira, and Turks will for the first time for many years again have to get used to handling coins.
© Kuwait Times 2005
