Richly dressed and with a Louis Vuitton bag in hand, a tourist exchanges currency in one of the many exchange houses in Istanbul. She has already filled it with several wads of lire that she doesn’t bother to hide. She goes shopping, the change favors her and she finds herself in the ideal place to get rid of all that contingent of undervalued paper that drives the Turks to their skulls. The exchange houses in the Grand Bazaar are the ones with the best prices and the longest lines. But not all are tourists.

Since inflation has run rampant, Turks are investing in foreign currency, gold, cryptocurrency, jewelry and other assets they see as a safer bet than the Turkish lira, which has lost more than 80% of its value in the last five years. years. “There is a certain atmosphere of panic,” explains Erdem, Edu for Spanish tourists, an experienced guide who has included the state of the country’s economy among his priority issues to deal with visitors. “People think that the price of the dollar and the euro will continue to rise, that’s why we Turks are investing in buying those currencies, so if you want to give me some bonus at the end of the visit, please do it in your currency. This way they will avoid me having to change them at the Grand Bazaar”, the guide ironically, not without a trace of reality in the background.

This week, the exchange rate of the Ottoman currency against the euro remained at record lows (0.034 euros). According to economists, its collapse is the result of an era of economic mismanagement by newly re-elected President Recep Tayyip Erdogan, who in recent years has pressured the central bank to cut interest rates despite high inflation. from the country. Since winning a close election last May, Erdogan has tried to set the course for the economy by putting two heavyweights at the helm of strategic institutions including the country’s Central Bank, now chaired by Hafize Gaye Erkan, and the Finance Ministry. , with Mehmet Simsek, who have progressively raised rates in order to stop the escalation of prices.

“We have committed to upholding market-friendly, rules-based policies. The medium-term economic programme, scheduled to be presented at the beginning of September, will include structural and political reforms aimed at restoring fiscal health, improving the external balance and supporting disinflation. Rules-based policymaking is crucial to safeguard macrofinancial stability, increase resilience to shocks, and promote strong and sustainable growth. Therefore, we are confident that our efforts will have a positive impact on Turkey’s credit rating,” Minister Simsek tweeted on August 10 in response to the reservations expressed by Moody’s.

And it is that the lira continues to fall and has done so throughout the summer, oblivious to the readjustments and drowning Turkish families even more. That is why the Turks are once again queuing at the Grand Bazaar, the largest covered market in Turkey, where tourists and Istanbulians come together these summer weeks. For the latter, it is the place par excellence where they go to buy the gold that is usually given at weddings and births, and that families keep at home as savings to protect themselves from the continuous devaluation of their currency. At the moment, however, the critical point of 2018 has not been reached, when Erdogan promoted a “national mobilization” of its citizens to reactivate the Turkish economy. So millions of dollars and euros were exchanged for lira.

Today things are a little different and thanks in part to the fact that this summer Istanbul has become one of the most attractive destinations in the Mediterranean for tourists from countries such as Russia, the United States and the United Kingdom. The reason is precisely and curiously the weakness of the Turkish lira, a devaluation that will ultimately help the country to close the year with more than 45 million tourists.