What Is Turkish New Lira (TRY)?
TRY is the abbreviation for the official Turkish currency, the new lira. This currency is also used in the Turkish Republic of Northern Cyprus. The Turkish new lira breaks into 100 new kurus coins, and the lira will often have the symbol YTL shown.
As of August 2021, $1 USD is worth roughly 8.45 TRY.
- The Turkish New Lira (TRY) is the national currency of Turkey.
- Turkey has experienced high inflation rates compared to peer countries.
- The currency has been revalued several times in order to deal with inflation.
Understanding Turkish New Lira (TRY)
First introduced in early 2005, the Turkish new lira was equivalent to one million of the old Turkish lira. During revaluation in 2005, a new law removed the last six zeros from the value of the currency. The TRY printed its ninth issue in 2009.
The history of the release of the Turkish lira as a currency splits into two periods. The first Turkish lira is the period between the years 1923 and 2005. 2005 marks the start of the second Turkish lira period.
Throughout its history, the currency has been pegged to the French franc, British pound, and both hard and soft pegging to the U.S. dollar. There is no longer an explicit peg, but Turkey actively intervenes in the currency markets and attempts to influence the value of the TRY.
The TRY has, at times, ranked as one of the least valuable currencies in the world. After rampant inflation, it saw revaluation in 2005. This revaluation of the TRY began the period of the second Turkish lira. As of May 2021, one Turkish new lira is worth approximately 12 cents in U.S. dollars. So a single U.S. dollar is worth about 8.3 liras.
Turkish banknotes and coins depict portraits of Mustafa Kemal Atatürk, the founding father of the modern Republic of Turkey, at different points of his life since the 1930s.
An economic crisis in 2001 led to the devaluation of Turkey's lira, and a wave of economic reforms occurred in 2005. State-owned businesses, such as telecommunications companies and oil refineries, were privatized and the central bank ran a tight monetary policy to restrict spending and ensure inflation did not destroy economic gains.
Before these economic reforms took place, Turkey's economy relied heavily on foreign aid as about 80% of Turkey's GDP was external debt. Moreover, Turkey's external debt as a share of GDP grew to a record 62.8% in 2020.
Turkey remains classified as an emerging market and the TRY continues to face bouts of instability and volatility as the country continues to struggle with inflation and economic growth. On August 10, 2018, for instance, the Turkish lira plunged by more than 20% in a single day into record low territory against the U.S. dollar due to a combination of economic and geopolitical problems plaguing Turkey.
Besides suffering from rapidly rising inflation and political pressure to keep interest rates low, the country faced a looming debt crisis that threatened to place further pressure on the economy and currency.