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Turkish Currency
A lot of you may be aware of this but I thought it'd be a worthwhile post anyway.

Since 1 January 2005, YTL (New Turkish Lira), became the new currency unit of Turkey. The Law for YTL, #5083 was published in the Official Gazette dated 31 January 2004.

The previous currency, TL (Turkish Lira), had six zeros eg 1TL was 1,000,000TL. The reasoning behind this previous system of currency was the high inflationary process, which started in the 1970s, and obliged expression of economic values in terms of billions, trillions and even quadrillions. In this process, the cash demand of economy was met by new banknotes in larger denominations that were put into circulation almost every two years since 1981.

As a result of this process, Turkey was the only country where the highest denominated banknotes (20million TL banknote) were circulated. This fact not only undermined the reputation of the currency but also adversely affected the currency's functions as a medium of exchange and store of value. Also, figures with many zeros led to problems in accounting and statistical records, IT, payment systems and transactions at the cashiers office.

Removing six zeros from the currency coupled with the ongoing efforts to driving inflation down to single digit numbers was a very important step from the point of its effects on the reputation of the currency. Meanwhile, deleting zeros from the currency eliminated the technical as well as operational problems arising from the use of figures with multiple zeros. Therefore monetary expressions were simplified and taking records and making transactions became easier.

In sum, the changeover to New Turkish Lira was necessary both for the prospective positive effects on the currency's reputation and for technical reasons. The New Turkish Lira was also a symbol and evidence of Turkey's determination to drive down inflation.

While determining the name of the new currency unit, the expression of "Lira", which was the unique currency unit traditionally used throughout the Republican period after the War of Independence and identified with Turkey in international markets, was preserved.

It's interesting to note many countries that dropped zeros from their currency units opted for adding the adjective "New" before the name of their currency units in order to facilitate the transition and omitted the word "new" after a while. 49 countries have so far removed zeros from their currency; Brazil deleted 18 zeros in 6 operations, Argentina 13 zeros in 4 operations, Israel 9 zeros in 4 operations, Poland 4 zeros in 1 operation, Greece 3 zeros in 1 operation etc.

Following the transition to YTL on 01.01.2005, both TL and YTL stayed in circulation for one year. People were able to use both types of money as they did their shopping. Since both currencies stayed in circulation through 2005, it was a legal obligation to show the prices of goods and services both as TL and YTL on price tags and lists until 2006. Now only YTL is in circulation.

Old banknotes and coins in circulation were withdrawn as of 01.01.2006. However, for 10 years, these TL banknotes will be exchanged by the Branches of the Central Bank. Ziraat (Agriculture) Bank will carry out this task at cities where Central Bank does not have branches.

At the second stage of the operation the expression "Yeni" (New) will be removed and the use of the expression "TL" resumed as of 1st of January 2009.

The composition of denominations for YTL banknotes are; 1,5,10,20,50,100*, and denominations for coins are 1,5,10,25,50 New Cent and 1 YTL. The sub-unit of YTL is YKr (Yeni Kurus) and 1 YTL = 100 YKr.


* I'm not sure if it has occurred yet, but a 200YTL banknote is to be introduced into the currency.

Sources: All About Turkey Yahoo!

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