Turkish currency drop: Turks rush to change dollars to lira

Urged by Erdogan, Turks scramble to convert dollars to lira

The lira has lost a fifth of its value this year, thanks to a resurgent dollar and political concerns.

The dollar’s high value against the lira has prompted a call from President Erdogan for Turks to exchange their dollars for local currency or gold - prompting a wave of ingenious ways for the public to do so.

The campaign, which started last week as a response to the plunging Lira, was bolstered by Erodan, who called Turks to exchange cash for gold or Lira. Turks responded by heading to currency exchange offices and jewellers to offload their dollars.

Small businesses have also got in on the act, offering incentives of free gifts or discounts to anyone who wishes to convert their currency - some of them fairly unusual.

In Ankara, fish seller Take Arikan is offering a kilogram of anchovies free to anyone who can show proof of a $100 conversion.

"This is a small contribution to foil the plot against our country," he says, referring to the name of the campaign, "Sell Foreign Currency, Foil the Plot."

“Foiling the plot” refers to the local perception that countries are actively collaborating to weaken the Turkish Lira. Erdogan himself reinforced this view with a statement on Friday saying Turkey would “foil the tricks of some forces” by urging citizens to dig deep to find any foreign currency they had saved and convert it into Lira or gold.

At the same time, Erdogan urged banks to cut interest rates, stating the volatility caused by rising foreign currency values would not have a negative impact on Turkey’s economy - which he stated was “threefold richer than it was 14 years ago” when his Justice and Development Party first came to power.

Erdogan’s call to convert currency was heard and heeded by the Turkish stock exchange in Istanbul which converted all its cash assets into Turkish lira.

Meanwhile, on a more local level, Turkish citizens are doing their bit.

In Konya, three restaurants are offering the city’s famous dish of etli ekmek, minced meat served on a thin bread, for anyone who can show they’ve exchanged $500.

In Gaziantep, another restaurant is offering free meals to those who can show a $200 conversion. The restaurant’s owner Mustafa Colak pointed out that the dollar’s fast rise threatens his and other businesses, and urged other Turks to convert their dollars into Lira. He added that he’d served free meals to fifteen people already.

In Elazig, a barber is offering free haircuts to anyone presenting a currency conversion receipt, saying the country’s future was at stake.

"We are all aboard the same boat and it is not all about money. You can earn it again in the future and replace it but this is our country, our children's futures are at stake here," the barber told reporters.

It’s thought the current situation might pre-empt a new economic system that won’t rely on dollars.

Volatility won’t affect economy, Erdogan says

The turbulence in Turkish markets following the surprise US election result won’t affect the country’s economy in any significant way, Erdogan said last week.

“This will be a footnote to our economy," he said, reminding Turks that the economy was three times richer than it was 14 years ago.

Referring to his push to lower interest rates, Erdogan cited the developed economies like the US, EU countries and Japan, where ultra-low interest rates are often imposed, and lamented the fact Turks were forced to suffer high interest rates.

"Why on earth do they have such low rates while our interest rates hover around 14, 15, or 16 percent? We will pave the way for investors with low interest rates. Only the finance sector benefits from high interest rates. I also recommend this for the state lenders," he said.

Turkey to use local currencies to trade

In efforts to shore up the lira, Turkey’s taking steps to trade with China, Russia and Iran in local currencies, Erdogan announced on Sunday.

"If we buy something from them [foreign countries], we will do that in their currency; if they buy something from us, they will do it in our currency," he said, saying that Turkey would "play its own game" in the economic arena against "all games" played against it.

Starting with the yuan and ruble is pure common sense: China and Russia are Turkey's two biggest trading partners; its third largest is Germany. Announcing a step to trade with Iran in rials might be indicative of a policy shift towards Eurasia.