In the world of currency, the Turkish lira is a fairly new addition. While the use of currency has a long stronghold in that area of the world (the first golden coin was minted there in 1467), the lira itself was not introduced until 1844. This gold coin was known as the Ottoman Lira as the country was still part of the Ottoman Empire.
The Ottoman lira, including both the original gold coin and the paper denominations that followed, remained in circulation until 1927. At this time the Turkish lira was introduced, which included medium sized silver coins and paper notes in the denominations of 1, 5, 10, 50, 100, 500, and 1000.
The Turkish lira remained stable until the 1970s, at which point the country suffered from extreme inflation. Over the next 20-30 years, the value of the lira continued to rapidly depreciate. In 1966, 1 US dollar was the equivalent of 9 Turkish lira. By 1988, it was 1 US dollar to 1,300 Turkish Lira. And by 2001 it was 1 US Dollar to 1,650,000 Turkish lira. Not only did this hurt the lira in the world market, but it forced the Central Turkish Bank to continuously mint new, larger denominations about every two years.
The continued depreciation of the currency forced the Turkish government to eventually take action. In 2003, the Grand National Assembly of Turkey issued a law that allowed the redenomination of the Turkish lira by the Central Bank of Turkey. This redenomination, together with a plan to tackle inflation and issue more controls in the Turkish banks, was to help the Turkish economy and money recover from the past few decades.
The redenomination created a new currency, called the New Turkish Lira, and removed six zeros from the old Turkish lira. The New Turkish Lira was officially introduced in 2005, and the old Turkish lira was forced out of circulation by the end of 2005. The transitional period continued until January 1, 2009, when the “New” was officially dropped from its name and it simply became, once again, the Turkish lira.
The new lira was introduced with the hope of stabilizing the currency and economy of Turkey. Since that time, the lira has become continuously stronger, rising against both the dollar and the euro.