Wednesday November 24th 2021
After the lira fell sharply
Apple stops sales in Turkey
Inflation in Turkey is high. The domestic currency is losing more and more of its value. Many people try to invest their money in valuable things – technology and cosmetics. The hope is to be able to sell these again at higher prices in the foreseeable future. Now a manufacturer intervenes.
Due to the crash of the lira, iPhones and other electronics are currently in great demand in Turkey. So hot that Apple temporarily stopped selling some products through its Turkish website. “Currently not available,” said the website, one day after the Turkish currency crashed to a new record low. Since the beginning of the year, the lira has lost more than 40 percent of its value; since the beginning of last week alone, the decrease has been almost a quarter.
“People flock to our stores,” said an employee at an Apple store in Istanbul. They see iPhones and other electronic products as a store of value rather than an item of everyday use. “People know that a year later they can sell things for more than they paid for.” Smartphones, computers and cosmetics or other imported goods currently cost significantly less in Turkey than in the USA, for example, because of the drop in the lira. In addition, there is inflation of around 20 percent. Many Turks assume that the price increase will continue.
At around 13 lira, one dollar currently costs more than ever. The Turkish currency last lost so rapidly in value in 2018 – at the time, a severe economic crisis was the result. The country’s central bank lowered the key interest rate to 15 percent last week, also under pressure from Turkish President Recep Tayyip Erdogan, who is an avowed opponent of interest rate hikes.
Central banks in other countries are doing exactly the opposite: To curb rising inflation, they raise interest rates or prepare interest rate hikes.
Economists criticize the rate cuts massively and describe them as “ruthless”. Companies are warning of economic difficulties caused by the decline in the lira. “If the central bank does not step in soon, the financial system can no longer withstand it,” warned the former chief economist of the central bank, Hakan Kara, on Twitter. At the current exchange rates, inflation could rise to more than 30 percent in the coming months.