World Affairs Forum
- Jan 26, 2024
- 1,699
- 695
Down a dimly lit alleyway tucked just inside Istanbul’s Grand Bazaar, a few dozen men are packed together, shouting, waving, and frantically speaking on their phones, others nervously pacing.
This “standing market” — a low-rent version of a chaotic stock exchange floor — is where Istanbul’s traders come to deal in precious metals and currencies. These days it’s dollars and gold they’re after. Turkish lira, not so much.
“Right now our money is almost worthless. Since people haven’t seen inflation fall, they don’t trust the Turkish lira anymore,” explained Adnan Kapukaya, a trader and market expert.
nflation in Turkey remains sky-high — official figures show prices rose 67% last month compared with February 2023, though unofficial estimates suggest the real number is more than 100%. And this despite the Turkish central bank hiking interest rates to an eye-watering 45% in January — up from a low of 8.5% a year ago.
But even at that rate, savers are still losing money to inflation. So, in order to shelter their savings, people are showing up in the gold markets of the Grand Bazaar with whatever they have — modest savings or, sometimes, a suitcase full of cash, says Omer Tozduman, a gold dealer.
“In previous years people were buying real estate or land, but right now, because the interest rates are so high, they either put their money in the bank (to earn high interest) or buy gold,” he said.
Others are piling into stocks, fueling a market boom that is second only to Japan’s this year.
Central Istanbul is dotted with foreign exchange booths and gold sellers — in some areas it seems there’s one on almost every block. Many advertise “no commission” and, if you’ve got dollars in hand, there really is none. Most exchange offices in or around the historic bazaar are offering to buy dollars at exchange rates even better than the current market rate to meet the soaring demand.
This “standing market” — a low-rent version of a chaotic stock exchange floor — is where Istanbul’s traders come to deal in precious metals and currencies. These days it’s dollars and gold they’re after. Turkish lira, not so much.
“Right now our money is almost worthless. Since people haven’t seen inflation fall, they don’t trust the Turkish lira anymore,” explained Adnan Kapukaya, a trader and market expert.
nflation in Turkey remains sky-high — official figures show prices rose 67% last month compared with February 2023, though unofficial estimates suggest the real number is more than 100%. And this despite the Turkish central bank hiking interest rates to an eye-watering 45% in January — up from a low of 8.5% a year ago.
But even at that rate, savers are still losing money to inflation. So, in order to shelter their savings, people are showing up in the gold markets of the Grand Bazaar with whatever they have — modest savings or, sometimes, a suitcase full of cash, says Omer Tozduman, a gold dealer.
“In previous years people were buying real estate or land, but right now, because the interest rates are so high, they either put their money in the bank (to earn high interest) or buy gold,” he said.
Others are piling into stocks, fueling a market boom that is second only to Japan’s this year.
Central Istanbul is dotted with foreign exchange booths and gold sellers — in some areas it seems there’s one on almost every block. Many advertise “no commission” and, if you’ve got dollars in hand, there really is none. Most exchange offices in or around the historic bazaar are offering to buy dollars at exchange rates even better than the current market rate to meet the soaring demand.
