Turks Welcome 2005 With New Currency

The new lira banknote, which is worth one million old lira and can be exchanged for 0.74 dollars or 0.55 euros, went into circulation on Saturday, January 1.

According to the Turkish Central Bank, the old banknote will remain usable till December 31, 2005.

“We are happy that we have given the lira back its credibility,” Turkish Prime Minister Recep Tayyip Erdogan said as he drew new lira banknotes from a cash dispenser.

The Central Bank said it put into circulation some 15 billion liras, of which 1.2 billion are Kurus (the Turkish piaster), which disappeared more than two decades ago.

Turkish authorities said circulation of the new currency went problem-free.

“The system is working perfectly, better even than we expected,” Sertyac Ozinal the official in charge of coordinating bank operations, told Anatolia news agency.

Over the past two months, propagation campaigns on the new banknotes were held in schools, markets and trade and industrial facilities by the economy ministry.

Market Stability

Circulation of the new banknote was hailed by Turkish economists as a move necessary to stabilize the financial markets in the country.

“The new lira and consequent amendments in the accounting programs will stabilize the Turkish financial market,” Mohamet Kuc, chairman of the independent accountants and financial advisors chamber, told IslamOnline.net.

The new banknotes will help the Turkish treasury save some 1.5 billion dollars a year, he said.

The currency reform was introduced after an economic austerity program backed by the International Monetary Fund pulled the country out of a recession which had brought it to the brink of economic collapse in 2001.

The inflation rate, which in 2001 exceeded 100%, currently stands at about 10 percent, the lowest in almost 30 years.

Erdogan’s government aims to bring it down to four percent by the end of 2007.

The IMF is also expected to make 10 billion dollars available to Turkey soon under a new three-year standby agreement to reorganize the Turkish economy.

Turkey is attempting to stabilize its economy as it pushes for membership in the European Union, which agreed last month to open membership talks with the mainly Muslim country.

Eighth Currency

The new banknote is the eighth in the history of the Turkish republic.

According to the Turkish Central Bank, the first banknote was put into circulation in 1927, just one day after scrapping the Ottoman note that carried Arabic letters.

The first currency carried the photo of founder of the Turkish republic Mustafa Kemal Ataturk and his companion Ismet Inono.

As of 1951, Ataturk’s photo dominated all Turkish banknotes.