Turkey’s state mint has reduced the weight of the one Turkish lira coin to 6.6 grams from 8.2 grams.
Abdullah Yasir Sahin, general manager of the mint, announced the move on April 15. The mint has also played with the composition of the metals (copper, zinc and nickel) in the coins to overcome losses, he added.
In 2022, the mint produced 1.25mn of the coins and took a Turkish lira (TRY) 600mn loss on production, according to Sahin.
Xinhua news agency reported that the cost of producing the one lira coin stood at more than three lira prior to the changes.
Turks, meanwhile, are complaining that automats do not accept the new coins.
Video: Sahin explains the changes to the coins; the automats are failing to accept the coins; Turks are complaining about the situation (daily Cumhuriyet).
In 2021, the nominal values of Turkish lira coins fell below the coins' scrap values.
Sahin denied that scrap dealers were melting down the coins given smelting costs in relation to the spread between the coins' nominal and scrap values.
The digital USD/TRY lately set off on another record-breaking spree. The latest record, set on April 6, is TRY 19.45. From early March, the pair shot through barriers in the 18.80s that for a short while proved an obstacle. The pair is now mainly trading in the 19.30s, with some spikes.
At end-2020, the pair stood at 7.4.
Amid the booming lira supply and hard currency outflows via record trade deficits, officials only keep the lira from entering into a nosedive by coercing bankers into blocking and gumming up domestic FX demand. Also supportive are unidentified inflows and support from “friendly countries”.
Another lira calamity would come as no surprise. It could happen at any time.
The turbulence-free mood on the global markets, meanwhile, remains intact. Turkey’s five-year credit default swaps (CDS) remain below the 600-level, while the yield on the Turkish government’s 10-year eurobonds remains around the 9%-level.