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The rising price of metals used in the production of coins has pushed the cost of minting Turkey’s 1 lira coin to over 3 lira, according to lawmaker Deniz Demir from main opposition Republican People’s Party (CHP).
Turkey’s ongoing battle with inflation and the depreciation of the Turkish currency have led to unprecedented challenges for the monetary system.
Demir pointed out that the production cost of the 1 lira coin has reached 3.16 lira and referred to the rising price of metals such as copper, nickel and zinc.
In order to bring down production costs, the weight of the coins has been reduced. The weight of the 1 lira coin dropped from 8.2 grams to 6.6 grams and that of the 50 kuruş coin from 6.8 grams to 5.5 grams, which means a saving of around 30 percent in production costs.
Inflation has eroded the purchasing power of the lira, with bread prices approaching 15 lira and making smaller denominations increasingly irrelevant.
“Coins like the 1 lira and 50 kuruş have completely lost their value,” Demir was quoted by Turkish media as saying. Sharing more details about the cost on social media, he revealed that the 25 kuruş coin (1 lira is 100 kuruş) costs 1.86 lira to produce, while the 50 kuruş coin costs 2.63 lira.
The strain on Turkey’s monetary infrastructure is not limited to coins. Recent reports suggest that ATMs are breaking down under the strain of processing large volumes of low-value banknotes. Despite calls for larger denominations, the government has resisted issuing new 500 or 1,000 lira bills. This reflects President Recep Tayyip Erdoğan’s long-standing policy of maintaining the symbolic stability of the lira after the abolition of six zeros in the early 2000s.
Economic mismanagement has caused the value of the lira to fall by almost 700 percent since August 2018, with the USD/TRY exchange rate exceeding 35 lira per dollar as of December 18.
Inflation continues to be a problem for consumers. Independent estimates put real inflation at 86.7 percent in November. Companies have also been forced to introduce hyperinflationary accounting standards.