The depreciation of the Turkish lira (TL) has undermined purchasing power and this has hit the TRNC which is “an importer country”.
Fikri Toros Chairman of the Turkish Cypriot Chamber of Commerce says that a large amount of Turkish goods which are exported are indexed to foreign currency, which increases the cost of their import to the TRNC. As profits are calculated in TL in the TRNC, this creates a serious imbalance. Consequently the economy is in crisis, which will hit all sectors, he said.
He said: “When businesses have losses in turnover, they reduce the number of their employees and reduce their business activities. Unfortunately, this is what is happening now. Serious unemployment has begun and I think that it will increase during the next few months.”