TRY - Turkish Lira

Turkish Lira overview

The Turkish Lira is an integral part of Turkey's national identity and economy, despite the challenges it has faced over time. Over the years, the Lira faced severe devaluation due to inflation, prompting various monetary reforms. In 2005, a major currency reform took place, removing six zeros from the currency, and the new "New Turkish Lira" (TRY) was introduced, in an effort to stabilize the economy.

The Central Bank of the Republic of Turkey (CBRT) is the institution responsible for issuing and managing the Turkish Lira. Despite efforts to stabilize the Lira, inflation and political factors have continued to cause fluctuations in its value.

The Turkish Lira is not only used in Turkey but also in the Turkish Republic of Northern Cyprus (recognized only by Turkey) and in some areas of Northern Syria, particularly in regions controlled by Turkish-backed forces.

History of the Development of the Turkish Lira

The Turkish Lira originated from the ancient Roman currency "libra," which was a unit of weight used widely in European and Middle Eastern countries. Over the centuries, the lira became the official currency of many nations, including Turkey.

However, the lira has not remained unchanged throughout its history. Since the establishment of the Republic of Turkey in 1923, the lira has undergone several changes, most notably a revaluation in 2005.

In 2005, a significant event occurred in Turkey's monetary history: the reform of the old lira into the new lira. After experiencing a period of severe inflation, the Turkish government decided to "remove" six zeros from the value of the currency.

For example, 1 million old lira would be equivalent to 1 new lira (symbol: TRY). This was considered a necessary step to simplify the monetary system and improve public trust in the currency.

The new lira was called "Yeni Türk Lirası" (New Turkish Lira), and it began circulating on January 1, 2005. However, even after removing the large zeros, the lira continued to face difficulties as its value continued to decrease compared to stronger foreign currencies such as the US dollar (USD).

Turkish Lira denominations

The Turkish Lira is issued in both coins and banknotes.

Turkish Lira banknotes

Currently, Turkish banknotes are available in denominations of:

• 5 TRY

• 10 TRY

• 20 TRY

• 50 TRY

• 100 TRY

• 200 TRY

All of the above banknotes feature the image of Mustafa Kemal Atatürk – the founding leader of the Republic of Turkey. This reflects the deep respect the Turkish people have for the man who led the country out of the ashes of the Ottoman Empire and laid the foundations for a modern nation. The current banknotes are intricately designed, with high-security features to prevent counterfeiting.

Turkish Lira coins

In addition to banknotes, Turkey also issues coins in smaller denominations, including:

• 1 kuruş

• 5 kuruş

• 10 kuruş

• 25 kuruş

• 50 kuruş

• 1 lira

One lira is divided into 100 kuruş, similar to the euro's division. These coins are mainly used for small transactions and remain in regular use in daily life.

Current Exchange Rate of the Turkish Lira

The exchange rate of the Turkish Lira has undergone significant fluctuations in recent years, largely influenced by political, diplomatic, and economic factors. Despite currency reforms and government interventions, the Lira continues to face devaluation against stronger currencies.

The exchange rate of the Lira relative to strong currencies remains low and highly volatile. At the end of 2023 and the beginning of 2024, the Lira fluctuated around 18-19 TRY/USD, with sharp short-term increases and decreases. Although the Lira has shown slight stability recently due to central bank interventions, it is still not enough to alleviate concerns about the future of the currency.

The Future of the Turkish Lira

The future of the Turkish Lira is uncertain, with experts offering differing forecasts. Some argue that unless Turkey enacts significant reforms in monetary policy and addresses macroeconomic issues, the Lira will continue to lose value in the future. However, if the country can resolve political, economic, and diplomatic challenges, the Lira may recover and become more stable.

An important factor in the Lira's recovery is improving Turkey's international relations and foreign policy. Better relationships with major trading partners such as the European Union and the United States could help boost investor confidence in the Turkish economy, which could, in turn, increase the value of the Lira.

However, in the short term, the Lira's depreciation may continue, especially if inflation and public debt issues are not effectively addressed. Experts warn that the weakening of the currency could persist until significant economic and political reforms are implemented.