The fact that currency trading is now taking place in the bazaar is due to the policy of President Recep Tayyip Erdogan before the elections in May.
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Istanbul Turmeric, fresh coffee and copper mocha cups – the Grand Bazaar in Istanbul is an experience for the senses. Now the rustling of wads of banknotes is added more and more. You can regularly see men pushing containers full of bills through the streets. At the exit, the money is received by armed security guards and heaved into armored cars.
The fact that currency trading is now taking place in the bazaar is due to the policy of President Recep Tayyip Erdogan before the elections in May.
The Turkish central bank is to support the exchange rate of the lira so that imports do not become too expensive. Because voters want to continue buying cars, smartphones and petrol from abroad at reasonable prices. First, the central bank supports the lira rate by buying lira itself, thereby tightening the amount of money in circulation. Many other states do the same.
Second, it prohibits companies from holding large dollar and euro reserves in their accounts. They have to exchange the money for lira and thus also support the exchange rate. This is an unusual measure.
Despite the ban, the companies want to hold foreign currencies because they fear the lira will plummet after the election. That is why they are now trying to get cash in foreign currency.
And so a new group joins the sellers in the bazaar: the currency dealers. “Bank employees bring large amounts of lira cash every day and collect foreign currency at the bazaar,” says a man who opened a kind of foreign exchange office there. “Because of this, the FX prices in the bazaar are higher every week than the previous week, and the gap opens in favor of the bazaar.”
Households also stock up on foreign currencies. And because the government is making normal currency exchange more and more difficult, they are increasingly resorting to what is probably the most beautiful stock exchange in the world: the bazaar.
>> Read here: The lira is suddenly too strong – and causes losses on the Istanbul stock exchange
If you listen to the gentlemen negotiating with the rolling iron boxes, you can easily learn something for your own haggling. There is a struggle about courses and delivery dates.
According to the Turkish business newspaper “Ekonomim”, there is a very special customer at the cash counter: the central bank itself.
>> Read here: Rebel, conqueror, election loser? Why Erdogan’s power in Turkey is faltering ahead of the elections
The government called the reports lies. But one thing is clear: Anyone who currently pays for their carpet, mocha or porcelain vessel in the bazaar in euros or US dollars is a particularly welcome guest.
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