Euro – Turkish Lira

Turkish lira is the monetary unit of Turkey. Introduced on 29th October 1923 during reforms, conducted by Atatürk, replacing the Ottoman lira. The issuer is the Central Bank of the Republic of Turkey. Currently, Turkey uses a floating exchange rate regime. The criterion for the effectiveness of the exchange rate policy is inflation.
The euro is the official currency of 19 countries of the “”eurozone”” with a population of about 340 million Europeans. In November 2013, the cash circulation was 951 billion euros, which made this currency the owner of the highest total value of cash circulating around the world, outperforming the US dollar in this indicator.
The euro was introduced to the world financial markets as an accounting currency in 1999, and on 1st January 1 2002, banknotes and coins were put into circulation. The euro replaced the European currency unit (ECU), which was used in the European monetary system from 1979 to 1998, in a ratio of 1:1. The issuer is the European Central Bank
The lira exchange rate against the dollar and euro demonstrates a high sensitivity to political events that determine the possibilities for Turkey’s cooperation with the European Union, as well as changing its state structure. The strengthening of the political influence of the current Turkish President Erdogan is provoking the outflow of capital from the country and the weakening of the positions of the national currency. The dynamics of the EUR/TRY pair is also influenced by the USD/TRY and EUR/USD rates.