Turkish lira

Turkish lira
source
Currency name in local	Türk lirası tr
Iso code	TRY
Iso number	949
Image title 1	Series 9 banknotes (2009)
Issuing authority	Central Bank of the Republic of Turkey
Issuing authority website	www.tcmb.gov.tr
Mint	Turkish State Mint
Inflation rate	68.5% (April 2024)
Inflation source date	Turkish Statistical Institute
Subunit ratio 1	1/100
Subunit name 1	kuruş
Frequently used coins	1, 5, 10, 25, 50 kuruş; 1 ₺
Rarely used coins	1 kuruş
Frequently used banknotes	5, 10, 20, 50, 100, 200 ₺
Rarely used banknotes	500, 1000 ₺ (rarely circulated)

Turkish lira. The Turkish lira is the official currency of Turkey and the Turkish Republic of Northern Cyprus, issued by the Central Bank of the Republic of Turkey. Its subunit is the kuruş, with one lira equaling one hundred kuruş, and its symbol is ₺. The modern lira, introduced in 2005, replaced the previous lira at a rate of one million to one following a period of severe hyperinflation.

History

The lira's origins trace back to the Ottoman Empire, where it was a gold coin first minted during the reign of Sultan Mehmed II. Following the empire's collapse, the currency was adopted by the new Republic of Turkey in 1923, initially pegged to the French franc and later to the British pound and the United States dollar. A prolonged period of chronic inflation began in the 1970s, exacerbated by political instability and economic policies, leading to the introduction of higher denominations like the 500,000 lira banknote by the 1990s. The government of Recep Tayyip Erdoğan and then-Minister of Economy Kemal Derviş oversaw a radical redenomination in 2005, creating the "new Turkish lira" and removing six zeros from the old currency. This reform was a central pillar of Turkey's economic program following the 2001 Turkish economic crisis and its agreement with the International Monetary Fund.

Coins and banknotes

Coins are minted by the Turkish State Mint and feature denominations in kuruş and lira, often bearing the portrait of Mustafa Kemal Atatürk. Current banknote series, such as the "E9 Emission Group," celebrate prominent Turkish cultural figures, including the mathematician Cahit Arf on the 10-lira note and the novelist Ahmet Hamdi Tanpınar on the 50-lira note. Security features on these notes incorporate advanced holographic strips and watermarks depicting Atatürk to prevent counterfeiting. Previous series have honored other national icons, such as the architect Mimar Sinan and the poet Mehmet Akif Ersoy, whose likeness appeared on the 100-lira note before the 2009 redesign.

Exchange rates and inflation

The lira operates under a floating exchange rate regime managed by the Central Bank of the Republic of Turkey, and its value has experienced significant volatility, particularly since the 2018 Turkish currency and debt crisis. High inflation has been a persistent issue, with annual rates frequently exceeding 50% in recent years, as reported by the Turkish Statistical Institute. This depreciation has been influenced by monetary policy decisions, geopolitical tensions, and concerns over the political influence on the Central Bank of the Republic of Turkey, leading to substantial fluctuations against major currencies like the United States dollar and the euro. The economic policies championed by Recep Tayyip Erdoğan, which have at times opposed conventional interest rate hikes to combat inflation, have been a focal point for international investors and institutions such as Fitch Ratings and Moody's Investors Service.

Digital lira

The Central Bank of the Republic of Turkey is actively researching a central bank digital currency (CBDC), referred to as the Digital Turkish Lira. This project involves collaboration with Turkish technology companies and financial institutions like Havelsan and Aselsan for platform development and cybersecurity. Pilot tests and a "Digital Turkish Lira Collaboration Platform" have been established to explore the potential for a digital lira in retail payments and its integration with existing financial infrastructure. The research aims to assess the digital currency's impact on monetary policy, financial stability, and its role within the broader international landscape of digital currencies being explored by the European Central Bank and others.

International use

The lira's international use is primarily limited to Turkey and the Turkish Republic of Northern Cyprus, where it is the legal tender. In regions with significant Turkish diaspora communities, such as parts of Germany, Netherlands, and Bulgaria, it is sometimes accepted by certain businesses and exchange bureaus. However, its global reserve currency status is negligible, and it is not a major vehicle currency in international trade or finance, especially compared to the United States dollar or the euro. The currency's volatility has also limited its adoption in bilateral trade agreements with neighboring countries like Iran or Azerbaijan, though there have been periodic discussions about increasing its role in regional transactions.

Category:Economy of Turkey Category:Currencies of Asia Category:Currencies of Europe