New Turkish lira symbol reflects economy’s strength
The Central Bank of Turkey organised a contest to select the new symbol for the Turkish lira, yet far more than aesthetics is at stake.
By Menekse Tokyay for SES Türkiye in Istanbul -- 07/03/12
Bringing together the letters T and L to form the shape of an anchor, the new symbol for the Turkish lira signifies that the currency is a safe haven for investment. The upward parallel lines represent its rising stature on international markets.
"The Turkish lira has a symbol now, just like the US dollar, the euro and the yen," Prime Minister Recep Tayyip Erdogan said at a ceremony to present the new design on Wednesday (March 1st). He added that the introduction of the symbol is not just a technicality, rather, signifies renewed prestige for the national currency, the reawakening of the nation and its re-emergence as a global actor.
It seems that the dark days of the 1990s are gone for Turks who experienced triple-digit inflation levels, which rendered the money worthless.
Following the banking crisis in 2001, Turkey opted for a painful structural reform programme, changing market perceptions against the lira. The country also experienced inflation exceeding 100%.
In 2005, the government took the risk of stripping 6 zeros from the currency, while inflation returned to the single-digit level.
The timing of this attempt shows the rising trend of an economy determined to stand on its own feet, and a sign of decade-long stability and success, government officials argued. Turkey is also aiming to become one of the world's top ten economies by 2023 -- the 100th anniversary of the republic.
"The new symbol symbolises in a way the successful achievements of the last ten years under the AK Party government, vowing to promote the lira as a reserve currency in the long term," Guldem Atabay, chief Turkey economist at UniCredit, told SES Türkiye.
The Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity, conducted by the Bank for International Settlements, testifies to the quantum leap of the lira in terms of market availability. According to the survey, the circulation of Turkish lira in global markets increased by three-fold in 2010, compared to 2007.
Turkey's rising foreign trade is considered another facilitating factor for making the currency's new symbol known in global markets.
"The value of the Turkish lira used in foreign trade in 2011 increased to $794m (1.4b lira) in exports and $1.8 billion (3.2 trillion lira) in imports compared to 2010," Economy Minister Zafer Caglayan said.
The global rise of the lira showed outstanding resistance during the global financial crisis, once again reflecting widespread confidence in the financial system and economy. However, at this point, experts point to the need for sustainability.
"It is of utmost necessity to design the upcoming decades in a farsighted manner," Atabay said, noting the still-remaining structural imbalances and the need for a competitive economic policy.
Economist Deniz Gungen, a Foreign Economic Relations Board of Turkey (DEIK) co-ordinator, agrees. He adds that policymakers should focus on long-term structural reforms to transform the production structure and the relevant regulatory policies that support those reforms.
"As in the case of Greece, the strong currency does not mean always a strong economy. Symbols can sometimes be delusive," Gungen told SES Türkiye.
Independent Industrialists' and Businessmen's Association of Turkey (MUSIAD) Secretary-General Eyup Vural Aydin also thinks that more needs to be done.
"Although the new symbol is the result of the achievements made, the potential acquired and the stability reached by Turkey, it cannot be conceived as a last stop," Aydin told SES Türkiye. "What matters is that our money, used in the free markets, remains valuable and that it preserves its value on a sustainable basis."