On 27th January 2017, the Turkish lira was down at 1.79 against the Danish krone. This is historically the lowest exchange rate for the Turkish lira ever. Recently it has begun to rise slightly and at the moment of writing it is now at 1.90 (5th May). This is half of what it was just a few years ago. On 13th October 2010 the Turkish lira was at 3.38 against the Danish krone.
The low lira exchange rate entails a significant weakening of the purchasing power of the locals. Of course it does not affect everyday purchases so much, but if you are buying a car, radio/TV or a home, it means a lot and it can mean that Turkey, after many prosperous years, is now financially on the way to a period of declining growth. It is also hard on Turkey that so many imported goods are purchased in dollars or Euros which have risen significantly at the same time as the fall in the Turkish lira.
But on the other hand, tourists arriving with foreign currency really get value for their money.
This also explains some of the price increases that have been seen in recent years. A few years ago you could often buy a cold Efes for 5 TL, roughly 2.5 Euros – today it costs typically 12 TL, corresponding to approx. 3 Euros. So actually the price increase is not so great with an inflation of 8-10 % during most of the years.
The low Turkish exchange rate has also brought the sale of housing to the locals to a standstill, due to the greatly weakened purchasing power. The reasons for the weakened Turkish lira are many and are, among others, to be found in the uncertain political situation, the terror attacks in the large cities and the disturbances at the Eastern borders resulting in an influx of refugees. Turkey has taken in over 3 million refugees from Syria.
In general it is a good thing for tourists with Euros and Danish kroner when the lira is low – you get more for your money. And if you are a bit of gambler, it could be a very good idea to buy Turkish lira right now – as the prospect of it rising should be really great?
