Currency crisis in Turkey: No more iPhones in Turkish online retail

DThe rapid, but recently somewhat curbed, decline in the value of the Turkish lira is also having increasing consequences for consumers and businesses in the country. Turkish media report price increases for petrol and diesel as well as long lines of waiting and angry drivers before the price increase on Thursday. In online trading, some products such as iPhones are no longer available because dealers are holding back products in view of the uncertain situation and rising import prices.

Andreas Mihm

Business correspondent for Austria, East-Central and Southeastern Europe and Turkey based in Vienna.

There is a similar message from the real estate and automotive industries, where sellers withdrew their offers in anticipation of further increases in prices. On the other hand, car dealers tried to fill their stocks at current prices.

Equity eroded

The situation is also worsening in the case of groceries, whose prices rose at an officially measured rate of 27 percent year-on-year in October. Some supermarkets allegedly ration the supply of basic foodstuffs, while others report difficulties in getting supplies. The Turkish milk producers asked the government to raise the wholesale price for milk by 55 percent because, among other things, the cost of animal feed shot up.

Customers in a bazaar in Istanbul


Customers in a bazaar in Istanbul
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Image: Imago

Even exporters, whose business should tend to benefit from the drop in prices and whom President Recep Tayyip Erdogan wants to strengthen with his policy of low interest rates, speak out critically. The president of the Association of Exporters of the Aegean Region in Izmir, Jak Eskinazi, told the Cumhuriyet newspaper that currency fluctuations of up to 15 percent a day, as reached on Tuesday, cannot be dealt with. “The equity of our businesses has eroded.”

You don’t have to be a prophet to find out that “the banks will soon come to the point where they can no longer give credit.”

Customers in front of an exchange office in Istanbul


Customers in front of an exchange office in Istanbul
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Image: Imago

Government officials who think similarly, but would not get through to Erdogan, reports the Reuters agency, citing sources in the government. Erdogan was able to show a certain degree of political relief by reconciling himself with the United Arab Emirates (VEA), which had been enemies for years.

Police took action against demonstrators in Istanbul on Wednesday.


Police took action against demonstrators in Istanbul on Wednesday.
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Image: Imago

The deals reached on Wednesday include a $ 10 billion investment fund that Abi Dhabi’s sovereign wealth fund will use to finance investments in Turkey. The target sectors of the planned direct investments are the energy, petrochemicals, technology, transport, infrastructure, health, financial services, food and agriculture sectors.

In addition, the central banks of the two countries signed a cooperation agreement “to promote cooperation”. On the foreign exchange market there was speculation that the VEA could grant the Turkish central bank a kind of overdraft via a so-called swap agreement.

Similar agreements are already in place with Qatar, China and South Korea. Against this background, the rate of the lira stabilized on Thursday above 12 lira per dollar and around 13.60 lira per euro.

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