Today at Türkiye, it will be easier for people to go to the market to change their pounds than to go to the banks. The suffocating control it exerts on financial markets presidential government Recep Tayyip Erdogan that’s the main reason he brought it back Istanbul Grand Bazaar The 15th century is at the center of the nation’s commercial activity, according to Bloomberg news agency. Modern moneylenders seek refuge there, seeking to avoid a “meeting” with the Turkish authorities. In the labyrinth of the covered market, with its many antique shops, jewelers, leather merchants and stalls selling knick-knacks, there was also a need for a new parallel exchange rate. Turkish lira.

Since restrictions on local banks strengthened by elections that are seen as high-risk competition, this parallel parity has been established even more than the official one. “Whatever you do, do not keep Turkish lira in your wallets,” said an experienced gold and foreign exchange trader at the bazaar, who, like others, asked to remain anonymous to avoid possible repercussions because he spoke freely about financial problems. countries. . “Even buying feta cheese is the best investment.”

The micromanagement of the official foreign exchange market has resulted in neighboring financial groups ceding more dollar sales to the bazaar and its hundreds of exchangers. In narrow arched lanes where shopkeepers practice trade More than 500 years later, Erdogan’s latest attempts to crack down on betting against the value of the lira no longer have the same poignant impact. Foreign exchange transactions at the Grand Bazaar are legal and largely unrecorded, making it difficult to estimate daily turnover. But exchangers say business is booming, driven mainly by corporate clients. Huge four-wheeled safes drive through the Grand Bazaar escorted by security guards, transporting what shopkeepers say are dollars to large companies, including state-owned energy importer BOTAS, the market’s biggest foreign exchange buyer. Traders argue that the demand for hard currency from businesses increases the supply price.

Of course, the ability to buy and sell dollars outside the limits placed on banks comes with a price. The US currency is available at the Grand Bazaar with a premium of more than 5.2% to the interbank rate, according to data compiled by Bloomberg.

Traders argue that the demand for hard currency from businesses increases the supply price.

At 11:45 am in Istanbul on Thursday, the pound traded at 20.4550 per dollar in the bazaar, compared to the official rate of 19.4063 per dollar. The lira, regarded by Turks as a barometer of the health of their national economy, has weakened after years of unconventional policies championed by Turkey’s longest-serving leader, Erdogan. She is becoming increasingly vulnerable now that the citizens are ready to decide whether she will rule the country for the next five years.

Erdogan’s main rival in the presidential election, Mr. Kemal Kilicdaroglu, backed by a coalition of six opposition parties promising a return to economic orthodoxy. Regardless of who wins the election, traders are preparing for a painful period after the contest. The spread between the dollar and the Turkish lira in the bazaar compared to its banking counterpart has widened in recent months as the central bank stepped up measures to keep the lira under control ahead of the election. But the divergence came about recently after bank officials verbally asked credit unions to limit their dollar purchases, a decision that could eventually limit foreign exchange sales. Meanwhile, even outside the Grand Bazaar, the Turkish currency’s slow devaluation has begun to accelerate. The frequency of short fluctuations in the pound, especially in the early hours of trading, has increased, which indicates that the authorities are finding it increasingly difficult to contain demand for dollars.

“There are high expectations that the pound will weaken sharply after the election,” said another gold trader and contemporary jeweler. “Combined with central bank rules against buying dollars, this has created increased demand in the spot market here at the Grand Bazaar.”