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Lira decline in Turkey attracts bargain hunters from Bulgaria

2021-12-27T13:32:53.651Z


Despite support measures by the government, the Turkish lira has only stabilized slightly. People from Bulgaria and Greece come across the border to shop cheaply in the neighboring country.


Enlarge image

Bulgarian visitors pack their purchases into the car in Edirne, Turkey

Photo: Emrah Gurel / AP

They come in overcrowded cars and buses to take advantage of the cheap lira exchange rate for inexpensive purchases.

People from Bulgaria and Greece drive to neighboring Turkey and stock up on goods there, reporters from the AP news agency report.

Last week, President Recep Tayyip Erdoğan announced measures to stop the decline in the value of the Turkish currency.

The Turkish lira was in free fall in December and finally hit an all-time low of 18.36 against the US dollar on December 20 - a loss of more than 60 percent in one year.

After the Turkish government announced the support measures, the share price recovered somewhat.

On Monday, one dollar was now worth 11.4 lira - but that means the lira is still 35 percent weaker than a year ago.

The AP reporters describe how the north-west Turkish city of Edirne is haunted by bargain hunters.

Their first stop is the exchange office, then it goes to the markets and grocery stores.

On Christmas Eve, the city's Turkish market square was therefore full of buyers from Bulgaria.

One woman reported that she had set off at three in the morning to get on a bus that was supposed to take her across the border to Edirne, exchanged 200 Bulgarian lev for 1,150 Turkish lira and started shopping.

Another woman said she came to buy cheap gifts for her children and grandchildren as it was much more expensive in Bulgaria.

"You buy like crazy"

Turkey is in an economic crisis with an official inflation rate of more than 21 percent.

But for the Bulgarian buyers, the goods in the Turkish shops are a bargain.

Bülent Reisoglu, chairman of the Ulus bazaar cooperative in Edirne, said the number of foreigners has quadrupled in recent weeks.

The parking lots are full of Bulgarian cars.

It has become almost impossible to see license plates from Edirne or Istanbul, he said.

"They buy like crazy without knowing what they are buying," he said, describing the situation.

People bought certain things five to ten times as much.

People from neighboring Greece also exchange euros for lira.

One shopper told reporters she was happy to buy gifts for her family and herself.

While Bulgarian and Greek customers are besieging the shops in Edirne, the people in Turkey are feeling the pain of the decline in their purchasing power.

Sometimes they wait in long lines in the cold for bread.

President Erdogan has asked Turkish companies to lower their prices.

The main problem of the lira is the rapid loss of credibility of the Turkish central bank.

The central bank has been on a strict rate cut since late summer despite high inflation of a good 21 percent.

However, the price losses of the lira only fuel inflation - a vicious circle.

President Erdoğan is constantly putting pressure on the central bank to further cut interest rates.

Again and again he fired central bank members who opposed his course.

Erdoğan takes the view, contrary to common economic theory, that high interest rates promote inflation.

At the beginning of December he announced: "Interest is an evil that makes the rich richer and the poor poorer."

As part of his new economic program, Erdogan wants to create cheap loans, high exports and great growth.

mmq / AP / Reuters

Source: spiegel

All business articles on 2021-12-27

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