ISTANBUL — The Turkish lira hit new lows at the weekend as Turkey continues to face economic uncertainty with the lira continuing to fall and inflation rising.

Turkish citizens are feeling the pain of the economic turmoil that threatens the country. In just two weeks, the lira went from around 6.80 to $1 at its lowest point to over 7.20 in the first week of August.

To add to the misery, COVID-19 pandemic has affected foreign investment and tourism levels.

An undergraduate student and an IT analyst intern, has noticed the rise in prices lately. While the extent of the increase varies from product to product, he noted that there was a large increase overall. “I had to make some adjustments to my shopping routines,” Ismail Berker Beysel was quoted by Al Arabiya English as saying. “But nothing too major. I canceled some of my online subscriptions because of increasing foreign currencies. Also, I focused on investments and savings to plan ahead.”

Despite not having to make massive adjustments to his life, Beysel is looking for potential job opportunities abroad following his graduation in the event that the economic situation continues to worsen.

“I try to follow the news and I can see that the situation is getting worse,” he explained. “That’s why I focus on planning for the future. I’m searching for [potential] job opportunities in other countries.”

Even though he is looking at opportunities abroad, Beysel does not plan on leaving the country unless he absolutely has to. Fatih Pishkin also does not plan on leaving a country that he deeply loves.

Pishkin is a student who will sometimes work at his family’s coffee shop at a mall. While working there lately, he has noticed a significant decrease in foot traffic, Al Arabiya English said.

“The mall is maybe 10 percent full,” Pishkin told Al Arabiya English. “Before it was 80 percent.”

While much of this is due to fears surrounding the spread of the coronavirus, Pishkin argues that the economic situation has been a contributing factor as well.

According to economist Mustafa Sonmez, this economic turmoil first began in 2018 where signs of trouble began to show with economic growth being less than what Sonmez believed was within Turkey’s potential.

Then the pandemic struck, and tourism – one of the largest contributors to the Turkish economy – dried up.

“They [the government] don’t have enough currency in the central bank,” Sonmez told Al-Arabiya English, “because Turkey’s exports and tourism decreased especially in the pandemic.”

According to the economist, the lack of currency in the central bank is a contributing factor that has discouraged investors from coming to Turkey as they may not be able to make their money back much less a profit.

“That’s why new foreign currencies are not coming,” he said, “Investors are not sure that they can come to Turkey and make investments. That’s the problem with a shortage of foreign exchange.”

Now, because the prices for foreign exchange are increasing, inflation is increasing with imported products seeing the largest rise in price.

“If the foreign exchange price is up,” Sonmez explained, “it causes the prices [to increase] of anything imported or energy, any consumer good that’s imported or other imported goods. It causes a high inflation.”

In addition, the vast majority of people’s salaries are below the inflation rate, therefore decreasing their spending power and how much money they are able to put back into the economy.

“The consumer prices are increasing because most of the goods are imported,” Sonmez stated. “Both intermediate goods and any others are imported. So, when the Turkish lira decreases in value, it comes to the consumer as inflation.” – Agencies