Quiet panic in Turkey as lira loses shine and prices soar

People shopping at an Apple store in Istanbul yesterday. Turkey's President Recep Tayyip Erdogan on Tuesday asked his countrymen to boycott US electronics, including Apple's iPhone, to retaliate against US attempts to isolate Turkey's economy.
People shopping at an Apple store in Istanbul yesterday. Turkey's President Recep Tayyip Erdogan on Tuesday asked his countrymen to boycott US electronics, including Apple's iPhone, to retaliate against US attempts to isolate Turkey's economy.PHOTO: EPA-EFE

ISTANBUL • Prices have soared for imported goods, scaring buyers and sellers. Sales are off as Turks delay purchases or cut back. Everyone is quoting the exchange rate, feverishly calculating what to do with his or her savings, large and small, and watching the prices of goods daily.

"My pension is not enough," Ms Zerrin Yildirim said as she sat with a friend on the steps of their apartment building in an old quarter of Istanbul, bemoaning the prices in the nearby fruit and vegetable market.

Turks across the country have been thrown into a frenzy as the Turkish lira has lost 25 per cent of its value since last week.

A stand-off between Turkey and the United States, which has imposed sanctions, accelerated a long decline in the lira this year over fears of mismanagement of the economy.

President Recep Tayyip Erdogan is making several speeches a day, casting the economic crisis as a national struggle, and laying the blame for the lira's fall on foreign powers. But there are signs that the quiet panic setting in among ordinary citizens is threatening to undermine his nationalist appeals.

"People always complained about prices," said Ms Yildirim, 55, a retired intensive-care nurse. "But they still vote for the one guy they complain about."

Now, analysts warned, one effect of the steep depreciation of the lira was almost certain to be runaway inflation, which amounts to an instant pay cut, especially for the poor and middle classes.

Few would blame it on Mr Erdogan, however. Fruit seller Sedat Eski blamed the British, alluding to one of many conspiracy theories encouraged by Mr Erdogan that foreign powers were behind the currency crash to undermine Turkey.

"All the rich people pulled out their money at 2am," Mr Eski said.

Turkey's richest people had moved their money to Britain, he said. "And who do you think is pulling their strings?"

About the only ones who seemed to be enjoying the plunge in the lira were foreign tourists, who were snapping up sudden bargains on luxury goods in the high-end district of Nisantasi.

"I have been doing a lot of shopping," said Ms Amanda Ibrahim, 28, an economics assistant who was on a trip from Sweden. Prices were down 40 per cent because of the exchange rate, she said.

"A couple of days ago, it was more expensive here than in Sweden," she said.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on August 16, 2018, with the headline 'Quiet panic in Turkey as lira loses shine and prices soar'. Print Edition | Subscribe