‘Our Money Has No Value’: Frustration Rises in Turkey at Lira Crisis

ISTANBUL — Lines outside bread stores and gas stations; farmers defaulting on loans; impromptu street demonstrations. The signs of economic distress in Turkey are all too clear as the lira continues a dizzying slide.

Sporadic protests have broken out around Turkey and the opposition parties have called for a series of rallies to demand a change of government after the lira crashed sharply last week. The latest week of turmoil follows months of worsening economic conditions for Turkish citizens. The currency has lost more than 45 percent of its value this year, and nearly 20 percent in the last week, continuing its downward trend on Tuesday.

Economists have tied the currency crisis to President Recep Tayyip Erdogan’s direct interference in monetary policy and his determination to lower interest rates.

The latest crash in the currency came after Mr. Erdogan gave a speech last week outlining his determination to keep rates low as a way of promoting economic growth. He reaffirmed his opposition to raising rates again in comments to reporters aboard his plane as he returned from a visit to Turkmenistan on Monday.

President Tayyip Erdogan of Turkey addressing members of his party last week. He has said he will “never compromise” on interest rates.Credit…Murat Cetinmuhurdar/Ppo/Via Reuters

“I have never defended raising interest rates, I don’t now and will not defend it,” he told the reporters. “I will never compromise on this issue.”

There are rumblings of public dissent, unusual for a country where only officially sanctioned demonstrations are permitted and the main television channels and newspapers follow the government line.

Scores of people have been detained for joining street protests. The police detained 70 people in several districts of Istanbul last Wednesday who were protesting the government’s management of the economy, after a record drop in the lira the day before.

The Confederation of Progressive Trade Unions issued a blunt statement on Wednesday. “That’s enough. We want to make ends meet,” it read. “Unemployment, high living costs, price increases, and bills are breaking our backs.”

An Istanbul shopping district last week. Some traders in the city said business was sharply down.Credit…Ozan Kose/Agence France-Presse — Getty Images

Necla Sazak, an 80-year-old retired bank employee heading home with a bag of groceries, said she was surviving on credit cards.

“Our purchasing power dropped — our money has no value anymore,” she said.

Business has stalled around the country as inflation scares away domestic shoppers and causes producers to hoard goods.

“I didn’t sell anything since the morning,” Asuman Akkus, the 29-year-old owner of a clothing store in Istanbul, said one recent afternoon. “It is deserted here this week and it is 100 percent because of the dollar.”

Opposition parties have renewed their call for the government to resign and for Mr. Erdogan or Parliament to call early elections. Yet they are in a bind, without the seats in Parliament to force a vote for early elections and wary of triggering unrest that could prompt Mr. Erdogan to impose a state of emergency, which would suspend normal democratic procedures.

Police officers detaining a protester during a demonstration in Istanbul last week.Credit…Bulent Kilic/Agence France-Presse — Getty Images

Mr. Erdogan, who is sliding in the polls, will not call elections before they are scheduled in June 2023, a political ally, Devlet Bahceli, leader of the Nationalist Movement Party, said last week. In the meantime, Mr. Erdogan ratcheted up the pressure on his opponents by detaining Metin Gurcan, a military and political analyst and a leading member of an emerging opposition party, DEVA, on charges of espionage.

Mr. Erdogan has promised that low interest rates will help kick start the economy within three to six months, but economists said they detected little confidence in his policies at this stage.

“I don’t think he has the confidence of the nation anymore,” said Atilla Yesilada, an investment analyst with Global Source Partners. “There’s an urgent problem of deepening poverty and the wheels of the economy are coming to a standstill,” he said.

Some loyal supporters of Mr. Erdogan, when asked, insist that everything is fine, but even the pro-government columnist Abdulkadir Selvi, of the Turkish daily Hurriyet, said he disagreed with the Mr. Erdogan’s economic policy. He recalled an episode during an earlier economic crisis in 2001 when a shopkeeper threw his cash register at the prime minister, sparking a countrywide revolt.

Outside a currency exchange office in Istanbul last week. The Turkish lira has lost more than 45 percent of its value this year.Credit…Sedat Suna/EPA, via Shutterstock

“We can’t ignore what is happening today,” Mr. Selvi warned. He added: “We should stay strong but we shouldn’t miss the fact that broad economic turmoil has broad political consequences.”

Shortages are emerging, including in imported medicines and medical equipment, and even at bakeries, Mr. Yesilada, the analyst, said. A loaf of bread still sells at 2.5 liras, or about 20 cents, but bakeries are complaining that their costs are closer to 4 liras a loaf, he said. “Soon they are going to shut down bakeries and then we are going to have bread riots,” he said.

The Turkish public talks of little but the economy.

“We used to be able to go and have tea with our friends in a cafe somewhere, but now a glass of tea costs 7 liras and so we don’t go,” said Cansu Aydin, a high-school graduate. “Our social lives have come to a stop, and now it’s as if we are living just to survive.”

Some Turks have expressed concerns over their ability to afford basic goods. Credit…Erdem Sahin/EPA, via Shutterstock

Oguzhan Yelda, 21, a student in Istanbul, said he worried especially about “utility bills and basic goods like oil, sugar, flour.” Many young people were leaving the country to take menial jobs as cleaners and waiters abroad, he said. “When I graduate, a bleak future awaits me.”

Dogan Gul, 60, was sitting outside a bank in Istanbul on Monday, waiting for it to open so he could make a payment on a loan. “We cannot get by,” he said. “The rent has gone up from 1,500 liras to almost 2,500 liras since last year. I don’t know where this is all going.”

He said he could not afford the cost of transportation to visit relatives.

“For the future of my children, what can I say?” he lamented. “They are each trying to make sure they have a meal once a day. They can’t even think about the next day. They can’t plan their futures. This is not just the case for me but for all of Turkey.”

For Yaman Ayhan, who sells clothing online, the answer is plain. “The leaders have to change,” he said. “Just a decision for snap elections would make the lira gain some value.”

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