Turkey's official currency is the Turkish lira, abbreviated TRY and symbolized ₺. The Central Bank of the Republic of Turkey (Türkiye Cumhuriyet Merkez Bankası), headquartered in Ankara, has sole authority to issue currency since its establishment in 1930. Banknotes circulate in denominations of 5, 10, 20, 50, 100, and 200 lira. Coins exist in 1, 5, 10, 25, and 50 kuruş, plus 1 lira. One lira equals 100 kuruş. The ninth and current series of banknotes, introduced beginning in 2009, features Mustafa Kemal Atatürk on the obverse of all denominations. The reverse designs depict other historical figures: Aydın Sayılı on the 5 lira note, Cahit Arf on the 10 lira, Mimar Sinan on the 20 lira, Fatma Aliye Topuz on the 50 lira, Buhurizade Mustafa Itri on the 100 lira, and Yunus Emre on the 200 lira.
The lira has experienced significant volatility over the past two decades. In 2005, Turkey redenominated its currency, removing six zeros from the old lira. What had been 1,000,000 old lira became 1 new Turkish lira on January 1, 2005. This followed decades of high inflation that had rendered the previous currency impractical for daily transactions. The transition period ran through 2008, during which both old and new lira circulated simultaneously at a fixed rate. Currency instability continued after redenomination. Between 2008 and 2023, the lira depreciated substantially against major foreign currencies. Exchange rates that stood near 1.5 TRY per US dollar in 2008 exceeded 28 TRY per dollar by late 2023. This depreciation accelerated particularly between 2018 and 2023, driven by factors including divergent monetary policy, geopolitical tensions, and market confidence issues.
Inflation in Turkey reached 64.8 percent year-on-year in December 2021 according to TurkStat, the official statistics agency. By October 2022, official inflation peaked at 85.5 percent annually, the highest level since 1998. Producer price inflation exceeded 150 percent during the same period. The Central Bank's policy response diverged from conventional approaches, with interest rate cuts implemented during 2021 even as inflation accelerated. The benchmark one-week repo rate fell from 19 percent in September 2021 to 14 percent by December 2021, then to 8.5 percent by September 2022. This approach reflected stated economic theory prioritizing lower rates to reduce inflation, contrary to standard monetary frameworks. Real interest rates remained deeply negative throughout this period. Following the May 2023 presidential elections, monetary policy shifted. The Central Bank raised the benchmark rate from 8.5 percent in May 2023 to 45 percent by January 2024, though real rates remained negative given prevailing inflation levels.
Foreign currency transactions occur frequently in Turkey despite being officially discouraged. The government introduced regulations in 2018 limiting foreign currency use in domestic transactions. Decree 85, published September 13, 2018, prohibits pricing real estate, vehicles, and most goods and services in foreign currencies within Turkey. Leases and employment contracts may not specify payment in foreign currency between Turkish residents. Violations carry administrative fines. These regulations aim to promote lira usage and reduce dollarization. Foreign currency accounts at Turkish banks remain legal for residents and non-residents. As of December 2022, foreign exchange deposits by Turkish residents totaled approximately 258 billion dollars according to Central Bank data, representing roughly 54 percent of total deposits in the banking system. This figure reflects persistent preference for dollar and euro holdings among Turks seeking to preserve purchasing power.
Currency exchange services operate throughout Turkey. Banks handle currency exchange during business hours, typically 9:00 AM to 5:00 PM Monday through Friday, though hours vary by institution. Exchange offices (döviz bürosu) maintain longer hours and concentrate in tourist areas, commercial districts, and transit points. These offices display buy and sell rates for major currencies including US dollars, euros, British pounds, and occasionally other currencies. Exchange rates at offices may offer better terms than banks, but variation exists between establishments. Comparing rates before exchanging money is standard practice. Istanbul's Grand Bazaar, Taksim Square, and Sultanahmet district contain numerous exchange offices. Izmir's Kemeraltı Bazaar and Konak Square similarly feature multiple bureaus. Antalya's Kaleiçi district and major coastal resort areas have extensive exchange facilities. Exchange offices require identification for transactions. Turkish law mandates reporting currency exchanges exceeding 100,000 lira equivalent.
ATMs (bankamatik or ATM in Turkish) are widespread in Turkish cities and tourist areas. Most accept international cards bearing Visa, Mastercard, Maestro, and Cirrus network symbols. Machines typically dispense Turkish lira only, though some locations in Istanbul, Antalya, and other tourist centers offer euro or dollar withdrawal options. Daily withdrawal limits generally range from 2,000 to 5,000 lira depending on the bank and card type. Transaction fees apply for foreign cards. The issuing bank typically charges a foreign transaction fee ranging from 1 to 3 percent, plus a flat per-withdrawal fee often between 3 and 5 dollars or equivalent. The Turkish ATM operator may add an additional fee, typically 10 to 30 lira per transaction. Checking fee structures before withdrawal prevents unexpected charges. ATMs in Turkey use dynamic currency conversion (DCC) optionally. When offered, DCC presents the withdrawal amount converted to the cardholder's home currency at the ATM's exchange rate. Declining DCC and accepting the charge in Turkish lira generally results in better effective exchange rates, as the card network rate usually exceeds the ATM operator's conversion rate.
Credit and debit cards see extensive acceptance in Turkish urban areas and tourist infrastructure. Visa and Mastercard work at the vast majority of establishments accepting cards. American Express and Discover have more limited acceptance, primarily at hotels and larger retailers. Restaurants, shops, hotels, and museums in Istanbul, Ankara, Izmir, Antalya, Bodrum, and other significant cities routinely accept cards. Contactless payment works at most modern terminals. However, cash remains necessary in many contexts. Small restaurants, street food vendors, local shops in residential neighborhoods, intercity bus ticket offices, dolmuş (shared minibus) services, and businesses in rural areas often operate cash-only. Markets and bazaars, including Istanbul's Grand Bazaar and Spice Bazaar, predominantly require cash, though some individual vendors accept cards. Archaeological sites managed by the Ministry of Culture and Tourism increasingly accept cards at entrance gates, but smaller sites may only take cash. Villages and rural regions of Anatolia, the Black Sea coast, and southeastern Turkey rely almost entirely on cash transactions.
Payment security in Turkey follows European EMV chip standards. Chip-and-PIN verification is standard, though chip-and-signature remains accepted. Contactless limits typically reach 500 lira for tap transactions without PIN entry. Card fraud protections exist through Turkish banking regulations. Law 5464, the Credit Card Law enacted in 2006, establishes consumer protections including liability limits for unauthorized transactions. Cardholders must report lost or stolen cards promptly to limit liability. Once reported, liability for subsequent fraudulent charges typically falls to the issuing bank. Prior to reporting, cardholder liability may reach 150 lira for domestic cards under banking association rules, though individual bank policies vary.
Mobile payment adoption has grown substantially in Turkey. Domestic systems include BKM Express, developed by the Interbank Card Center (Bankalararası Kart Merkezi), which launched in 2016. BKM Express enables online and in-store payments linked to Turkish bank cards through a QR code system. As of 2023, participation includes over 30 Turkish banks. PayFix, developed by Garanti BBVA, provides mobile wallet services. Turkey's Instant and Continuous Transfer of Funds (FAST) system, implemented December 2020, enables 24/7 real-time lira transfers between bank accounts at any Turkish bank. FAST operates through customer phone numbers or Turkish identity numbers rather than account numbers, simplifying person-to-person transfers. International platforms including Apple Pay, Google Pay, and Samsung Pay function in Turkey with compatible Turkish bank cards. Availability varies by bank; major institutions including İş Bankası, Garanti BBVA, Akbank, Yapı Kredi, and QNB Finansbank support these services as of 2024.
Tipping practices in Turkey follow established norms. Restaurants expect tips of approximately 10 to 15 percent of the bill in sit-down establishments. Service charges appear on bills infrequently; when included, additional tipping is optional. Cash tips typically go directly to serving staff rather than through credit card payments, as distribution mechanisms vary by establishment. Rounding up the bill or leaving small change suffices at cafés and casual eateries. Taxi drivers do not expect tips, but passengers commonly round up fares to the nearest convenient amount. Hotel porters typically receive 5 to 10 lira per bag. Housekeeping staff receive approximately 10 to 20 lira per day, left in the room. Hammam attendants providing scrubbing and massage services expect tips ranging from 20 to 50 lira depending on service duration and location. Tour guides customarily receive 50 to 100 lira per day from participants, though amounts vary with group size and tour length. Hairdressers and spa service providers typically receive 10 percent of the service cost.
Sales tax in Turkey operates under the Value Added Tax (KDV - Katma Değer Vergisi) system. Standard VAT rate stands at 20 percent on most goods and services. Reduced rates of 10 percent apply to certain food items, agricultural products, and domestic passenger transport. An 8 percent rate covers textiles, leather goods, and specific food products. A 1 percent rate applies to selected agricultural products and newspapers. VAT inclusion in displayed prices is mandatory for retail transactions. The price shown on tags, menus, and shelves includes applicable VAT. Business-to-business transactions may show VAT separately on invoices. Non-resident visitors may claim VAT refunds on purchases exceeding 300 lira from participating retailers. The tax-free shopping system requires obtaining a tax-free form at the point of purchase, validated at customs when departing Turkey, and claimed at refund offices in airports or through mail. Refund processing companies including Global Blue and Planet operate in Turkey. Actual refunds typically amount to approximately 12 to 18 percent of purchase price after processing fees, despite the 20 percent nominal VAT rate. Customs validation must occur before checking luggage containing purchased items.
Income taxation in Turkey applies progressive rates to residents. The 2024 personal income tax brackets range from 15 percent on annual income up to 110,000 lira to 40 percent on income exceeding 880,000 lira. Four brackets exist: 15 percent up to 110,000 lira; 20 percent from 110,000 to 230,000 lira; 27 percent from 230,000 to 580,000 lira; 35 percent from 580,000 to 880,000 lira; and 40 percent above 880,000 lira. These brackets adjust periodically for inflation through revaluation rate announcements by the Ministry of Treasury and Finance. Bracket thresholds increased by 47.73 percent for 2024 compared to 2023. Corporate income tax rate stands at 25 percent for the 2024 tax year, increased from 20 percent in 2021. A temporary additional tax of 10 percent applies to banks and insurance companies. Non-residents pay tax only on Turkish-source income. Turkey maintains tax treaties with over 80 countries to prevent double taxation.
Customs duties and restrictions govern what travelers may bring into Turkey. Personal effects and items for individual use enter duty-free. Alcohol limits permit 600 cigarettes, 50 cigars, or 250 grams of tobacco products per adult. One liter of alcohol above 22 percent content or two liters below 22 percent may enter duty-free, plus two liters of wine. Five bottles of perfume or eau de toilette with total capacity not exceeding 600 milliliters qualify for duty exemption. Gifts valued up to 300 euros avoid duty for air travelers; the limit falls to 150 euros for land arrivals. Items exceeding these values or quantities face import duties ranging from 20 to 50 percent depending on product category. Turkish customs regulations prohibit narcotics, weapons without permits, and antiquities. Archaeological artifacts may not legally leave Turkey without Ministry of Culture and Tourism permission, which rarely grants for items of historical significance. Exporting items over 100 years old requires documentation from authorized museums. Medications require prescriptions for quantities exceeding personal use, typically defined as a 30-day supply.
Banking infrastructure in Turkey includes both state-owned and private institutions. Ziraat Bankası, established 1863, is Turkey's oldest bank and largest by asset volume, holding approximately 14 percent of sector assets as of 2023. Türkiye Halk Bankası (Halkbank), founded 1938, and Türkiye Vakıflar Bankası (VakıfBank), established 1954, complete the state-owned banking sector. Major private banks include İş Bankası (established 1924), Garanti BBVA, Yapı Kredi, and Akbank. Foreign banks operating in Turkey include HSBC, ING, and Denizbank (owned by Emirates NBD since 2019). Opening a bank account in Turkey as a non-resident requires a Turkish tax number, obtainable from local tax offices with passport presentation. The tax number (vergi numarası) serves as a prerequisite for most financial transactions. Banks additionally require proof of address, which may be a hotel reservation or rental contract for short-term visitors. Account opening procedures vary by institution but generally require in-person appearance. Some banks offer services specifically structured for foreign residents, with multilingual staff available at branches in Istanbul, Ankara, and coastal resort areas.
Foreign investment in Turkey operates under regulations administered by the Directorate General of Incentives and Foreign Investment, part of the Ministry of Trade. The Foreign Direct Investment Law 4875, enacted 2003, established equal treatment for foreign and domestic investors in most sectors. Restrictions apply to broadcasting, aviation, and maritime transport, where foreign ownership limits exist. Real estate purchase by foreigners became generally permissible under law amendments effective 2012, with exceptions for military zones and security-sensitive areas. Reciprocity applies; citizens of countries permitting Turkish citizens to purchase property may buy in Turkey. Current restrictions prohibit property purchases by citizens of Armenia, North Korea, Cuba, Nigeria, and Syria. Foreign individuals may acquire up to 30 hectares nationally, with a national cap of 10 percent of district area for foreign ownership. Title deed offices (tapu müdürlüğü) process property transactions. Military clearance verification occurs before foreign purchases finalize, typically requiring several weeks.
Cost of living in Turkey varies substantially between regions and has fluctuated significantly with currency depreciation and inflation. Istanbul consistently ranks as Turkey's most expensive city. Rent for a one-bedroom apartment in Istanbul's central districts including Beşiktaş, Kadıköy, and Şişli ranged from 15,000 to 30,000 lira monthly as of early 2024. Comparable apartments in outer districts cost 8,000 to 15,000 lira. Ankara rental prices typically run 20 to 30 percent below Istanbul equivalents. Izmir prices approximate Ankara. Coastal cities including Antalya, Bodrum, and Fethiye show seasonal variation, with peak summer prices often matching or exceeding Istanbul rates. Utilities for an 85-square-meter apartment average 1,500 to 2,500 lira monthly including electricity, heating, water, and garbage collection. Internet service costs 300 to 500 lira monthly for standard fiber connections. Mobile phone plans with adequate data range from 200 to 400 lira monthly.
Food costs in Turkey vary by shopping venue and product type. Local markets (pazars) operating in neighborhoods one day per week offer produce at lower prices than supermarkets. Seasonal vegetables and fruits at markets cost approximately 15 to 40 lira per kilogram for common items including tomatoes, cucumbers, peppers, oranges, and apples as of early 2024. Supermarket chains including Migros, Şok, A101, and BIM provide standardized pricing nationwide. A liter of milk costs approximately 25 to 35 lira. A loaf of white bread ranges from 10 to 15 lira. Chicken breast costs approximately 90 to 110 lira per kilogram. Beef prices range from 300 to 400 lira per kilogram depending on cut. A dozen eggs cost 50 to 70 lira. Rice costs approximately 40 to 60 lira per kilogram. Olive oil ranges from 150 to 250 lira per liter for standard quality. Imported products carry significantly higher prices; imported cheese, coffee, and packaged goods often cost double to triple domestic equivalents.