During the year, the depreciation exceeded 45%, and it fell 15% in one day like a free fall. This is the recent performance of the Turkish local currency lira. The lira has become the worst-performing currency in the world this year, not one of them.
In addition to increased exchange rate risks, "Turkish scams" created by the strange customs regulations also often occur. Foreign trade bosses, when exporting to Turkey, be sure to pay attention to the security of the payment!
On November 23, when Turkish netizens entered Apple's online store to shop, they found that although the website was operating normally, they could no longer buy anything with Turkish Lira.
Apple suspended sales in Turkey because the lira plunged 15% that day, breaking the psychological barrier of 13 lira to the dollar and breaking the highest record in history. If you continue to open the door for business, the result may be to sell one and lose one
It is reported that on the 23rd local time, the Turkish lira's exchange rate against the U.S. dollar fell sharply by 15%, falling below the 13 mark, reaching a minimum of 13.45 lira to 1 U.S. dollar, a record low. It fell below the two integer barriers of 12 and 13 within a day.
Apple’s emergency closed doors to thank guests are new, but for the Turkish lira, depreciation is the norm. Since the past 11 trading days, it has continuously hit a record low every day, the highest in nearly 20 years.
On the 13th, the Turkish lira against the U.S. dollar exchange rate fell below 10. On the 18th, the Turkish Central Bank announced that it would lower the benchmark interest rate by 100 basis points, and the Turkish lira against the U.S. dollar exchange rate quickly fell below the 11 mark. And just before, the Central Bank of Turkey lowered interest rates in September and October, and cut interest rates by 300 basis points.
Since the beginning of this year, the exchange rate of the Turkish lira against the US dollar has fallen by 45%, especially since last week, it has fallen by more than 20%. Before the 23rd plunge, the Turkish lira had become the worst-performing currency in emerging markets this year, and has now become the world's worst-performing currency.
What is this concept?
Everyone who does foreign trade knows that when a country’s currency depreciates, it is good for exports but not good for imports. Import costs will increase with the magnitude of the currency depreciation. Think about it, those Turkish importers who ordered in September for delivery in November, who is willing to bear such exchange losses?
In addition, Turks who feel that "money is worthless every day" began to "vote with money" and frantically purchase foreign exchange to protect themselves from currency devaluation and rampant inflation. According to data from the Central Bank of Turkey, as of October 1, foreign exchange deposits held by local residents totaled US$232.7 billion, an increase of 20% from the beginning of 2020.
As the Turkish lira continues to fall, the Turkish Ministry of Finance has issued new regulations requiring currency changers to register their customers' identities. Previously, only customers with a transaction amount of more than US$3,000 were required to submit personal information.
At present, people have speculated that the central bank of Turkey has no foreign exchange reserves...
Residents of Ankara, Turkey: I guess the Central Bank of Turkey does not have any foreign exchange reserves, so they cannot intervene. If they had 140 billion U.S. dollars, they might have intervened long ago, and the exchange rate of the lira to the dollar would not be as good as it is now, and the exchange rate of the lira to the dollar would not even fall below 10. Now, there is no limit to the increase in the exchange rate between the U.S. dollar and the Lira.
The exchange rate has depreciated sharply, the inflation rate is nearly 20%, and Turkish prices have soared!
The sharp depreciation of the exchange rate has further pushed up the cost of imported goods and fuel. Economic analysts said that although Turkey's current inflation rate is around 20%, it is expected that this ratio will rise to a higher level. This means that the price of this basic commodity has skyrocketed, while real income has depreciated, and people's lives have been miserable.
Residents of Diyarbakir, Turkey: "A 50 kg bag of flour used to be 100 lire, but now it costs 300 lire. Everyone is sad. Many people are thinking of ways to go abroad to find work. There is no employment opportunity in Diyarbakir."
Residents of Diyarbakir, Turkey: "A 50 kg bag of flour used to be 100 lire, but now it costs 300 lire. Everyone is sad. Many people are thinking of ways to go abroad to find work. There is no employment opportunity in Diyarbakir."
Turkish Diyarbakir shoe craftsman: "We can no longer purchase materials. In addition to rising foreign exchange, local prices have also skyrocketed. Our production has stopped, and we can only sit idle. There is no work and bread. I can't afford it soon, I really don't know what to say about it."
In the first eight months of this year, more than 60,000 companies went bankrupt in Turkey. The current unemployment rate in Turkey is above 10%, and the youth unemployment rate has risen to 22%.
In addition to exchange rate risks, foreign trade bosses also need to pay attention to "Turkish scams"!
Wonderful customs, creating a "Turkish scam"! Please pay attention to the security of the payment when shipping!
Before the ship arrives at the Turkish port, the freight forwarder needs to register the goods under the name of the consignee. Any changes in the future require the written consent of the original consignee. The direct result of such regulations is that the ownership has been transferred to the consignee before the actual delivery of the goods, regardless of whether the consignee has fulfilled its obligations in the trade contract.
