Moroccans in Turkey grapple with increasing living costs, as Turkish lira reaches new record low

The Turkish lira (TL) collapsed again on Tuesday to a record low. The devaluation is directly affecting living costs, as prices of basic goods keep rising. Inflation is specifically worrying many of the 22,500 Moroccan residents in Turkey.

The currency has lost more than 43% of its value against the dollar since the beginning of the year, observers and citizens alike fear the fall will continue, worsening the affordability of basic goods.

Doha, a 27-year-old Moroccan that lived and worked in Turkey for a few years, told Hespress EN that “living conditions are changing on a daily basis, the situation is just getting worse.”

The Moroccan national said that every day, “devaluation of the currency gets worse,” leading to “a general increase of prices starting from rent, groceries, bills, .. “

Many Moroccans Hespress EN spoke to are echoing Doha’s concerns. Abdo, a Moroccan student, and freelancer says the Turkish economy is now the source of “financial anxiety” for him and his friends.

“When I first got to Turkey two years ago, I used to spare TL 200 a month for groceries, and I was set, I had all I needed, today, TL 200 is nothing,” he says. The amount now can barely cover two weeks of basic groceries for a single-person household.

Milk alone used to cost TL 3, now the price for a gallon has tripled, set at TL 9 and expected to rise more. According to Hespress EN sources, public transportation costs have also experienced a significant increase in the last year.

Inflation is a direct result of a specific monetary policy, Turkish President Recep Tayyip Erdogan declared an “economic war of independence,” sending the lira plunging and leaving many citizens struggling to make ends meet. Erdogan’s policy defends increasingly low-interest rates, despite the growing inflation.

The president believes that high-interest rates encourage inflation, the Turkish Central Bank lowered its key interest rate again last week from 16% to 15%. This measure occurred for the third time in less than two months, as the new rates are below the level of inflation, which is approaching 20% year-on-year.

Skyrocketing prices are unfortunately met with stagnant salaries, as the Turkish government’s plan is to use low labor costs to incentivize foreign companies to invest in the country.

But Turkey’s most attractive attribute is also strongly affected by inflation. Turkey’s minimum monthly net wage was equivalent to approximately $380 on January 1, 2021. This Wednesday, it was worth $222, once again hurting residents’ buying power.

Abdo’s freelance gigs used to bring him around TL 600 to TL 1000, which significantly contributed to his monthly income. Today, that same check barely covers basic bills. “Rates and salaries have remained unchanged, but the cost of everything is growing regularly,” he says.

The Turkish economy is expected to grow by 9% in 2021 and 3.5% in 2022, while the president has dismissed fears of a currency crisis, saying that the government is encouraging investment, production, and exports.

Production-wise, as Turkey is heavily dependent on energy and raw material imports, the fall in the lira is fuelling inflation. Official annual inflation was 19.89% in October, four times the government’s original target.

Salary disparities are not prevalent among Turkish and Moroccan residents, but what does make a real impact depends on the currency workers get paid with.

Khalid, a 31-year-old Moroccan breadwinner for a family of three, told Hespress EN that since his old job paid in USD, he “felt immune to the dwindling value of the local currency.”
After changing jobs, he was suddenly getting paid in TL, which “made his life harder.”

Sources told Hespress EN that when you’re a foreigner paid in TL, it is virtually impossible to have a credit card or get loans since the set amount that needs to be deposited for the card equates to a two-month salary.

A major threat worrying experts lies in foreign currency deposits in Turkish banks. The sign of rising withdrawal demands could trigger more aggressive forms of capital controls.
Today, more than half of the deposits in Turkish banks are in foreign currencies, mainly dollars.

Despite the crisis, the Moroccans Hespress EN spoke to all said the impact on the population and Moroccan diaspora remains, for now, manageable. But that their worries for the future are exacerbated on a daily basis.

“Everyone can still all the necessities, people are adapting daily to the situation, they’re complaining but it’s not unlivable.” While many have had to restrict their spending to only include basic foods and rent, some are already venturing into “side hustles,” freelance projects, and second part-time jobs to try and keep a sense of normality.