Turkish Lira's devaluation hits TRNC hard despite move by Turkey's central bank

The negative influence from the devaluation of the Turkish Lira has continued despite measures taken by Turkey’s Central Bank.

The value of foreign currencies went up against the Turkish Lira (TL) again last week, only one day after the decrease noticed when Turkey’s Central Bank decided to increase interest rates.

According to Turkish Cypriot daily ‘Kibris’, the fact that Turkey’s Central Bank decided to raise interest rates did not significantly influence foreign exchange has raised the fears of the people living in the TRNC.

The devalued lira affects North Cyprus more than Turkey, notes the paper adding that school fees, rent and bank loans are usually paid in foreign exchange, while salaries are paid in TL. Therefore, the people remain stuck in a very difficult financial situation.

A loan of 200 sterling pounds was equal to 1,206 TL one week ago and has now risen to 1,299 TL. A loan of 200 dollars increased from 893 TL to 971 TL within the same period of time, while a loan of 200 euros increased from 1,055 to 1,138 TL.

It is predicted that the lira’s devaluation will also be reflected in fuel and electricity prices, as a result of which, an increase in the cost of many products, including food, clothing and medicines, will be inevitable.

Meanwhile, economist Dervis Deniz told Turkish Cypriot daily ‘Halkin Sesi’ that the per capita income in the TRNC fell from 15,000 US dollars in 2006 to 12,000 dollars in 2018, something which indicates that there have been no economic advances in the country.

Deniz expressed the view that the prosperity of the people will only improve with a very good economic plan and that financial support is needed for this plan.

We need to act in the same direction with Turkey, which is the country by which the financing will be secured, he argued, adding that because of “practical problems” they cannot adopt a different currency unit.

Adopting the currency of countries which do not recognise you as an entity only creates a different set of problems, he said.

Kibris, Halkin Sesi