Collapsing TRL hurts Turkish Cypriots

Analysts foresee TC coalition turning to Turkey for extra cash

the TRY was at its lowest compared to the EUR. The price for a litre of unleaded 95 petrol was 55 cents.

Yeniduzen reported that Greek Cypriots crossings to the north increased 46% in the first seven months of the year, compared to 2017, reaching 749,285.

Supporting the case that Greek Cypriot were encouraged by the drop of the Turkish Lira and are spending more in the north than before, JCC statistics show that Greek Cypriots spent 32% more in the first seven months of 2018 than they did in 2017. According to JCC, cards issued by banks in the south were used for purchases reaching EUR 6.7 mln in the north for January to July 2018. On the other hand, Turkish Cypriots spent EUR 11.5 mln in the south during the first seven months of 2018, 22% less compared to the same period last year.

In order to combat inflation, the Turkish Cypriot administration readjusts the minimum wage every six months. In June this year the minimum wage was set at TRY 2600 (gross), which equals, today, to 371 euros, based on the Friday exchange rate of 7 Turkish Liras to the EUR. Although the TC authorities had raised significantly the minimum wage from TRY 2,365 (gross), people’s purchasing power has dropped significantly. The minimum gross wage in the north was 592 euros in 2013, 436 in January 2018 and 371 in June. A family of four relying on one minimum wage will not be able to survive even if they chose to feed themselves only on simits (Turkish bagels) and tea. Purchasing three meals of one simit and one tea a day for a family of four costs 84 TRY, that is a total of TRY 2,520, which is some 240 Lira more than the net minimum wage. properties, and a one-off tax will be collected from casinos and betting offices. However, the measures announced by the coalition do not seem to be enough to counter the crashing weight of the TRY collapse.