Millions of Turks will lose their status as billionnaires today as the world’s biggest banknote, the 20-million lira bill (worth about R100), is formally declared dead.
At midnight last night Turkey adopted a new currency, the new Turkish lira, or YTL, replacing notes which for years had symbolised economic upheaval.
”Psychologically, and economically, this is an immensely important event,” said the finance minister, Kemal Unakitan. ”It proves that after years of hyperinflation our economy has finally stabilised.”
Under the old system monthly salaries were counted in billions while even the shortest taxi ride could set clients back five to 10-million.
With budgets quoted in quadrillions, bureaucrats faced the mind-boggling task of trading in figures that frequently challenged electronic calculators. The Turkish gross national product is estimated at around 424 quadrillion lira, or 424 000 000 000 000 000.
Until Friday, cartoonists often had a field day depicting the plight of ordinary Turks and tourists who invariably needed wads of cash for the simplest transaction.
”When I was a student back in the early 60s one dollar was worth nine Turkish Lira,” Unakitan said. ”After years of chronic inflation, the dollar is around 1,4-million Turkish Lira.”
One new Turkish Lira will equal one million Turkish lira and will amount to approximately R4, although both currencies will circulate until the end of 2005.
In recent months, state mints have worked overtime to produce 1,2-billion new coins. The YTL will also include kurus, which disappeared from circulation in the 80s. There will be 100 kurus to the YTL.
Turkey’s government introduced the new system after drastically reducing inflation as part of an austerity program backed by the International Monetary Fund.
Launched shortly after the governing AK party assumed power in November 2002, the tough economic measures have since brought the country out of its worst recession since the second world war. Inflation, which exceeded 100% in the mid-1990s, now stands at just under 10%.
The economic turn-around was decisive in last month’s momentous decision by EU leaders to open accession talks with the predominantly Muslim country later this year.
Announcing a nationwide campaign this week to inform the public of the new currency, the economy minister, Ali Babacan, said: ”Our money will gain respect. Our people’s confidence in their national currency will be restored.”
With some 1 600 tons of old notes set to be removed from circulation, the country’s central bank has started pilot programs to study ways of recycling the old currency. The hated old lira may well end up as insulation material or compost, officials said. – Guardian Unlimited Â