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French Version

Turkey to issue new currency - minus a few zeroes

ANKARA : Turkey will start a nationwide campaign soon to introduce the new Turkish lira, which will go into circulation on Jan. 1 and will be same as the old currency minus six zeros, Prime Minister Recep Tayyip Erdogan said Thursday.

"We will start a promotion campaign in the coming days," Erdogan told a news conference, flanked by Economy Minister Ali Babacan and Central Bank governor Sureyya Serdengecti. "We have three-and-a-half months for the campaign.

"Any questions that might arise ... will be answered by the competent bodies, and no questions will be left unanswered," he said, adding that the promotion would continue after the new currency hits the streets.

Inflation and financial crises over the decades hyper inflated the lira to the point that the smallest coin today is worth 25,000 lira ($O.O1), while the biggest bank note is 20 million lira (about $13).

For many Turks, the multi-zero currency is a stain on national pride, symbolizing economic failure. But a recent opinion poll shows many Turks are worried the currency reform will be inflationary.

But Erdogan said the move will only strengthen Turkey's drive to overhaul its economy.

"The reform is a concrete indication of our determination to bring down inflation and ensure economic stability," he said. "We will never take a step that will contribute to inflation."

After the reform, one new Turkish lira will equal one million lira - and, at current rates, the new currency will be worth $0.65 at current rates.

Both currencies will be used in a transitional period between Janu. 1 and Dec. 31, 2005.

The law also reintroduces the kurus, which disappeared from circulation over two decades ago. One new Turkish lira will be equal to 100 kurus.

The country's economy began its downward slide after a huge devaluation vis-a-vis the dollar in 1970. Turkey has been battling to rebuild its economy since 2001, when a banking crisis caused havoc, sent financial markets into turmoil and cut half the lira's value against the dollar.

The country has since been making headway with a tight economic austerity program, backed up by a $16 billion loan from the International Monetary Fund.

Ankara,09 21 2004
The Daily Star
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