The Turkish lira is the official currency of Northern Cyprus and Turkey. The new Turkish lira is the second issue that was introduced at the beginning of 2005. It is the same as 1 million of the previous Turkish lira.
During the 2005 revaluation, the legislation deducted the last six zeros from the currency’s value. In 2009, the ninth issue of the currency was published. The Turkish new lira is represented by the ISO code TRY and abbreviated as TL.
The Turkish lira is the official currency of Northern Cyprus and Turkey, represented by the ISO code TRY and abbreviated as TL.
The Turkish new lira is the second issue that was introduced at the beginning of 2005.
Currently, the TRY is experiencing a phase of devaluation, regularly hitting all-time lows.
History of the Turkish lira
The lira, including similar currencies of the Middle East and Europe, traces its origins in the libra, the unit of weight in ancient Rome. The introduction of the currency by the Roman Libra spread across Europe and the nearby eastern regions, where it began to be used throughout medieval times. The Turkish lira, the Italian lira (used until 2002), the French pound (used until 1794), and the British pound are the modern successors of the ancient currency.
The introduction of TRY as a currency is divided into two phases. The first phase of the Turkish lira was between 1923 and 2005. The second era of the Turkish lira began in 2005. Throughout its history, the Turkish lira was pegged to the British pound, the French franc, and the soft and hard pegging to the USD. Although there is no longer a clear peg, Turkey is actively intervening in the currency markets and is seeking to manipulate the value of the TRY.
The Turkish Grand National Assembly passed legislation in December 2003 enabling the redenomination of the Turkish lira by eliminating six zeros and introducing a new currency. The Turkish new lira was launched on January 1, 2005 to replace the previous Turkish lira at the rate of 1 new Turkish lira (ISO code TRY) equivalent to 1,000,000 old Turkish lira (ISO code TRL).
The revaluation caused the Romanian leu, also revalued in 2005, to become the world’s least valuable currency for a while. At the same time, the Turkish Government launched two notes in denominations of 50 and 100.
Current Turkish Lira
The new series of notes, the “E-9 Emission Group,” came into circulation on January 1, 2009. The E-8 series ceased to be available after December 31, 2009, but remained redeemable at the central bank branches until December 31, 2019. The E-9 notes are referred to as “Turkish lira” rather than “new Turkish lira.” The new notes come in varying sizes to avoid forgery.
The main distinction of the latest group is that each denomination portrays the iconic Turkish character rather than the architectural features and geographical locations of Turkey. The main color of the 5 TRY banknote was decided to be “purple” in the second set of current notes.
Currently, there are banknotes in denominations of 5 TRY, 10 TRY, 20 TRY, 50 TRY, 100 TRY, and 200 TRY notes in circulation, in addition to 1, 5, 10, 25, and 50 kurus coins (100 kurus is one lira) and 1 lira coins.
Turkish Lira Exchange Rate Crisis
TRY’s exchange rate intensified depreciation in 2018, hitting US$4.50/TRY by the second week of May and US$4.90 a week later. Among economists, the accelerated loss of value was generally linked to Recep Tayyip Erdoğan, who prohibited the Central Bank of Turkey from making the requisite interest rate changes. Despite Erdogan’s clear resistance, the Turkish Central Bank increased the interest rates sharply.
TRY dropped more than 20% against the US dollar on August 10, 2018, due to a mix of geopolitical and economic problems surrounding Turkey. In addition to suffering from growing inflation and government pressure to hold interest rates down, the country faced a debt crisis that threatened to bring more pressure on its economy and the currency.
Currently, TRY continues to decline in value, with the currency experiencing a phase of devaluation and regularly hitting all-time lows. TRY’s fallen by more than 400% since 2008 relative to the US dollar and the British pound.