Some bank branches handle so much cash that they have to refill their ATMs up to three times a day.
Years of high inflation are testing the physical limits of Turkey’s cash-based economy, as larger notes become increasingly insufficient to cover even everyday expensesaccording to the agency Bloomberg.
The highest denomination note, £200 ($5.80), now accounts for more than 80% of all cash in circulationup from 16% in 2010, according to central bank data.
Having lost almost all of its purchasing power, each note is worth enough to buy two filter coffees at Starbucks. In 2010, the note was worth almost $140.
The change is visible in Istanbul’s iconic Grand Bazaar, where pushcarts and makeshift suitcases line the alleyways outside currency exchanges, waiting to carry the growing volume of banknotes required for commercial transactions.
Some bank branches handle so much cash that they have to refill their ATMs up to three times a dayEkonomi newspaper reported on Monday, citing unnamed bankers. ATMs are expected to soon stop offering notes under £100the Turkish newspaper added.
So far, officials have not committed to printing larger notes. Central bank governor Fatih Karahan told MPs in June that “Analysis is ongoing” for the issue.
For Turks it is a reminder of the 1990swhen chronic inflation finally forced the government to erase six zeros from the currency to create the so-called new Turkish lira used today. Annual inflation slowed to just under 50% last month after consecutive years of high price rises, with inflation expected to top 85% in 2022.
Even with the rise of card payments, the Turkey it’s still a relatively cash-centric economy, with money transfer firm Wise Plc calling it “essential” for small payments, purchases and tips.
“There is 100% need for bigger notes”Fibabanka CEO Omer Mert said in an interview with Bloomberg in October. “ATMs are crashing.”
Source: Skai
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