ECONOMY

Turkey unveils new currency, scrapping six zeros from Jan. 1

ANKARA (AFP) – Turkey yesterday unveiled the much-awaited design of its new currency just two months before it goes into circulation in what officials describe as a major step in the country’s battle against chronic inflation. The New Turkish Lira – or YTL, as it is called here – comes into effect on January 1, 2005, scrapping six zeros from the current money, which has been a source of national shame as a symbol of economic failure and 30 years of hyperinflation. The smallest coin today is worth 25,000 lira (0.01 dollars or euros), while the biggest banknote is 20 million lira ($13 or 10 euros). «With the YTL, our country’s longing for low inflation is coming to an end; with the YTL, our currency’s longing for prestige is coming to an end,» Turkish Prime Minister Recep Tayyip Erdogan told a ceremony introducing the new currency, attended by cabinet ministers and financial authorities. After the reform, the banknotes in circulation will be 1, 5, 10 and 2O YTL, which correspond to today’s 1 million, 5 million, 10 million and 20 million notes and which will be almost identical in design. There will also be two newcomers: 50 YTL and 100 YTL, which, as is the case with the other notes, will carry portraits of the country’s founding father, Mustafa Kemal Ataturk on the front and pictures from Turkey’s cultural and natural heritage on the back. The reform will also reintroduce the kurus, which disappeared from circulation more than two decades ago. One YTL will equal 100 kurus. The biggest coin will be 1 YTL, while the smallest will be 1 kurus. The new coins will all have a crescent and a star – the symbol on the Turkish flag – on the obverse, with a portrait of Ataturk on the back. Both the new and old currencies will remain in circulation during a transition period until December 31, 2005, during which time labels will carry prices in both denominations. The government last year announced plans to knock six zeros off the embattled currency as it dramatically pulled down inflation under an IMF-backed austerity program to bring the country out of its worst recession since World War II. Annual inflation, which surpassed 100 percent in the mid-1990s, now stands at about 9 percent.