New Turkish bank note is symbol of the failed fight against inflation
ISTANBUL – Turks can now be millionaires 20 times over with a single banknote – and still fall below the poverty line. The new 20-million-lira note, which became legal tender yesterday and is worth around $12.50, is the latest symbol of Turkey’s long-term failure to fight inflation. Prices have risen by an average of about 80 percent a year for over a decade. Every time governments seem to be getting a grip on inflation, something happens to throw them off course. The current government brought inflation down to under 30 percent by February but then came a deep economic crisis which has cost about a million Turks their jobs and sent prices soaring once again. Wholesale prices have risen by over 80 percent this year, the State Statistics Institute said Saturday. Few believe the government can meet its target of a 70-percent year-end inflation rate, set out in a recovery program backed by $15.7 billion in loans from the International Monetary Fund and World Bank. The result is the latest new banknote – an embarrassment even to the man whose signature it bears. It’s very saddening, said Aykut Ekzen, deputy governor of the central bank, when asked how he felt about having his name on a note with seven zeros. Ekzen acknowledged that no other country’s currency was worth as little as the lira. He said there were plans to remove several zeros from the lira, as soon as the inflation rate reaches a level that allows us to do so. Turkey started printing 1,000-lira bills in 1927. The 5,000-lira bill didn’t appear until 1981 – but since then, bank note designers have been busy. In the last decade, there has been a new denomination every 17 months on average. The latest reminder of their crumbling currency comes amid hard times for most Turks, whose salaries and pensions haven’t kept pace with the lira’s fall of some 60 percent against the dollar this year. Workers earning the national minimum wage can now receive their entire monthly salary of around 120 million lira ($77) in just six bank notes. For consumers, the simplest trip to the supermarket costs millions. A jar of jam can cost 5 million lira ($3.20). The cheapest new cars retail at 10 billion lira ($6,400), though there are few buyers. It means a tax allowance for the public worth a total of 78 million pounds, said Finance Minister Takis Clerides.