Lira Crisis Piles Pain on Turkish Shoppers as Costs Soar
“Look at this, I have sold nothing!” said Cemile Baykal, sitting in front of piles of vegetables untouched on her Ankara market stall.
Traders like Cemile, who are suffering as Turkish shoppers shun their produce, say they know what is behind their pain — the fall in value of the local currency the lira caused by diplomatic sparring between Turkey and the United States.
Consumers have been buffeted by surging costs and economic uncertainty, with the Turkish currency sinking 20 percent in a month and 40 percent since the start of the year.
The lira’s plunge has piled pain on to an economy already roiled by high inflation, which is approaching 16 percent and has affected the most basic sectors of life such as transport.
For Cemile and her fellow traders that means higher costs to even bring their produce to the covered market in Ankara, where a thinning stream of customers is increasingly wary of opening their wallets.
“We are not selling, but we are obliged to come to earn our daily bread,” said Cemile, casting a glance at her unsold sacks of potatoes.
Turkish Lira against US Dollar.
Past Year: Lost 71% of value
Past Month: Lost 24% of value
Past Week: Lost 14% of value
Today: Gained 7% of value
— The Spectator Index (@spectatorindex) August 15, 2018
Affecting Every Family
Fruit seller Ilhan Gecgel said that while his sales have continued, he and his customers are feeling the sting of rising prices.
“I sell my fruit, but I suffer when I sell them. A kilo of figs at 10 lira ($1.73), is that possible? It’s absurd, they should be four or five lira,” he said, adding that ballooning costs are stifling daily life. “People are not even able to organize the marriages of their children.”
Altay Gultekin, a pensioner shopping at the market, said he has had to lower his quality of life as a consequence of the price rises.
“There is not a family who is not talking about this at home,” he said.
The standoff with Washington has snowballed into one of the worst Turkey-U.S. crises in ties in years over Ankara’s detention of an American pastor.
U.S. President Donald Trump tweeted last Friday that Washington was doubling aluminum and steel tariffs for Ankara, a move that sent the lira into freefall, although it has recovered slightly since then.
In response, Turkey’s President Recep Tayyip Erdogan has called for a boycott of U.S. electronic goods such as the iPhone and Ankara has sharply hiked tariffs on some U.S. products.
Economists warn that the lira’s plunge, which will have a direct impact on produce that Turkey imports, risks further increasing consumer prices.
Food costs rose 19.4 percent in the year to July, according to the latest figures, while transport rose 24 percent.
At his fruit stall, trader Yakup Kurdi said that even the price of plastic bags has doubled recently and he has been forced to nudge up prices for his customers.
Erdogan has slammed the fall of the lira as a “plot” aimed at bringing Turkey to its knees and urged Turks to exchange dollars into lira to support the local currency.
That idea had some support among Ankara’s shoppers.
Housewife Ayse Celiktas, outraged that turmoil on international markets can affect her shopping so much, said she would also put her faith in a traditional safe haven.
“Gold also has some value, let our jewelers earn something!” she said.
The precious metal is often given as a gift in Turkey and is a long-established investment.
But jewelers in Ankara’s old city said business was far from brisk.
“When the price of gold or the dollar increases (against the lira), this immediately slows down our activity,” he said.
“People panic and worry about what might happen,” he said. “Everyone is waiting.”