Turkish Cypriot spending in south collapses

** Falling Turkish lira to blame? **

Turkish Cypriot credit card spending in the south collapsed by 32.5% over the year earlier to EUR 1.28 mln in October, from EUR 1.69 mln in October 2010, according to data from JCC Payment Systems.
The main reason seems to be a sharp reduction of 123% in airline spending from EUR 63,036 in October 2010 to EUR 28,315 in October 2011, although it is not clear if this is because of an actual reduction in spending or a change in how the spending is calculated.
However, a suggestion that spending is more generally in decline comes from the figures on clothing (the biggest item), which fell by 36% from EUR 306,561 in October 2010 to EUR 225,185 in October 2011.
Similarly, spending in DIY stores fell by 45% to EUR 174,713, from EUR 253,901 in October 2010.
For the first ten months of the year, Turkish Cypriot card spending has fallen by 4.3% to EUR 14.02 mln, from EUR 14.65 mln in the same period of 2010.
As well as the squeeze on public-sector pay that started earlier in northern Cyprus than on this side of the Green Line, when inflation-linked rises were frozen, spending has probably been affected by the fall in the Turkish lira so far this year.
According to Shavasb Bohjdalian, CEO of Eurivex, a company that offers trading platforms that include the Turkish lira, the Turkish lira has dropped by 18.8% so far against the euro this year and by 15.5% against the dollar.
“Turkey has been hit because of the large current-account deficit,” he said.