Lira collapse leaves Turks bewildered

Anxious Turks struggled to keep up with a bewildering collapse in their currency and the main opposition party leader said the country was experiencing its darkest “catastrophe” as the lira slumped 15% on Tuesday against the dollar.

Tuesday’s meltdown follows weeks of steep falls in the lira which have already driven up prices, leaving ordinary Turks reconsidering everything from their holiday plans to weekly grocery shopping. read more

“There has not been such a catastrophe in the history of the Republic,” said Kemal Kilicdaroglu, leader of the opposition Republican People’s Party, blaming the currency free fall on President Tayyip Erdogan who has led the country since 2003.

“At this point, you are a fundamental national security problem for the Republic of Turkey,” Kilicdaroglu said.

Erdogan has pressured the central bank to slash interest rates in a move he says will boost exports, investment and jobs, but which critics say will further fuel double-digit inflation and erode the lira, cutting deeply into Turks’ earnings.

Shoppers at a central Ankara mall said they could not take their eyes off the lira rate, which plunged as far as 13.45 to the dollar on Tuesday. A year ago it was 8 to the dollar, last month it reached 9 and last week it hit 10.

“I’ve become unable to work without following the dollar,” said 28-year-old advertising agency worker Selin.

“I don’t think there is a single day where I don’t have to watch my budget, and the calculation changes 100 times by the time I get next month’s salary. There is nothing left, including toilet paper, that I buy without thinking carefully.”

Former prime minister Ahmet Davutoglu, a founding member of Erdogan’s ruling, Islamist-rooted AK Party before breaking away to form his own party, described the president’s economic measures as “treason and not ignorance”.

Kilicdaroglu, Davutoglu and some other opposition leaders have announced emergency meetings to discuss the currency after Tuesday’s crash – the lira’s second biggest fall ever.

‘We are sinking’

Turks took to social media to express dismay. Top trending topics on Twitter were dominated by hashtags on the economy including “We are sinking”, “Government resign” and “We cannot make ends meet”.

In the southeastern city of Diyarbakir, shop owners burned what appeared to be fake dollars on the street in a symbolic gesture of protest, saying: “We cannot sleep, we don’t know about our future.”

Several people who spoke to Reuters said that as soon as they received their salaries or pensions, they converted them into foreign currency.

“I have asked for an advance on my monthly salary just to convert it into dollars so that I can maintain some sense of value in my earnings,” said Emirhan Metin, 28, a lawyer in Istanbul. “It’s nearly impossible to focus or talk about anything else at this point.”

Haluk, a 36-year-old freelance film editor, said he was often paid with a lag of six to eight months. “So the contract I signed last month is worth 20% less today. Who knows how much it will be worth when I get paid six months from now?”

Doruk Akpek, CEO at a menstrual hygiene brand startup, said he tried to keep his savings in dollars and cryptocurrency, but added the situation was tougher for those who only had lira.

“There is also a psychological unhappiness, you see the country collapsing in front of your eyes. It impacts the morale and motivation of people,” Akpek said.

[Reuters]