Turkish Cypriots protest as economy sinks

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Growing discontent in the north over the worsening economy forced hundreds of Turkish Cypriots to take to the streets as a crashing Lira has diminished their purchasing power amid an inflation spike.

On Tuesday, hundreds of Turkish Cypriots participated in a demo called by a union platform of 14 organisations representing teachers, civil servants and media workers.

The protest took place outside the north’s assembly building in divided Nicosia.

The organisers came out against the ruling coalition of the right-wing National Unity Party (UBP) and the centrist Democrat Party (DP).

Unions claim the ruling coalition has impoverished Turkish Cypriots and turned them into ‘beggars’.

As prices for essential goods spike, along with a fluctuating lira, Turkish Cypriot imports, loans and the cost of higher education are affected as they are indexed to either the GBP, the euro or the USD.

The Turkish lira has been breaking unwanted records, as Turkey’s President Recep Tayyip Erdogan is adamant about “fighting the war on interest rates to the end”.

The Turkish Cypriot economy suffered from food-price inflation, reaching 37.4% in September.

Demonstrators demanded the cost of living reflects salaries and a currency that will protect people’s purchasing power.

Turkish Cypriots are experiencing a drop in their purchasing power due to the steep rise in prices on essential items due to the devaluation of the Turkish lira.

The currency is now slightly stronger, following support measures introduced by the Turkish government and Erdogan.

One euro is now around 11.43 Turkish lira, an improvement from two weeks ago when it hit a historic low of 18TL.

A recent talk of the north adopting the euro has put more pressure on the coalition.

The head of the coalition Faiz Sucuoglu defended his administration, arguing that it got a ‘vote of confidence’ six weeks ago, during which the Turkish lira lost 60% of its value.

Sucuoglu also said that with exchange rate trends now favouring the Turkish lira, petrol companies are taking back increases recently introduced on fuel.

He argued that prices are to drop some 20-30%.

Sucuoglu also promised to pay out some 220m TL in pensions and 262m TL for the salaries of civil servants, while 420m TL for 13th salaries would be paid by Monday.

Turkish Cypriot authorities also announced a 40% increase in the minimum wage from 1 January to 7,000TL (around €500).

The current minimum salary, 4,970TL (€370), was introduced in September.

Due to a frequently fluctuating inflation rate in the north, the minimum wage is revised every six months.

The Turkish Cypriots are heading for a general election on 23 January.

After losing some 60% of its value in 2021 alone, the currency gained some ground in the past week after the Turkish central bank said it would support converting foreign currency deposit accounts into lira deposit accounts to encourage reverse dollarisation.