By Jean Christou
TURKEY has included the Cyprus pound in a list of exchange rates in what is thought to be the first official acknowledgement of the island’s currency since 1974.
The move, although not important economically for Cyprus, is seen as politically significant as Turkey does not recognise the Republic.
The Cyprus News Agency (CNA), quoting an article in the Turkish daily Milliyet, headlined “Money Transcends the Green Line”, said the decree issued by the Turkish Foreign Ministry had been published in Turkey’s official government gazette.
The rate was quoted at 952,000 Turkish Lira (TL) to one Cyprus pound and is the first such official decree since 1974, the paper said.
Government Spokesman Michalis Papapetrou said yesterday he could not confirm if it was the first time Turkey had officially listed the Cyprus pound, but welcomed the development.
“As far as I know there is no precedent, but I can’t confirm it for sure,” he told the Cyprus Mail, but he added the pound’s official inclusion was “positive news”.
“It means indirect recognition of Cyprus,” he said.
Papapetrou added that steps towards Turkish recognition of Cyprus had begun in December when President Clerides attended the conference of the Organisation for Security and Co-operation in Europe (OSCE) in Istanbul as head of state.
“With this, and now with the exchange rate, it is a sign of indirect recognition,” he said.
Milliyet said the decision had been taken because many Turkish Cypriots – including Turkish Cypriot staff at the British bases and British High Commission – worked in the south of the island and got paid in Cyprus pounds.
The paper said the only outlet for these workers was to exchange the money on the black market in the north, but diplomatic sources in Nicosia said this was not accurate.
“Most hold Cyprus-pound accounts in Turkish Cypriot banks,” the source said. “It’s not officially recognised there but they can change the money in the banks.”
Cyprus pounds are in big demand in the occupied areas and are widely accepted in shops and restaurants.
“It is free-flowing in the north,” the source said. “In some ways they prefer the Cyprus pound because it doesn’t lose value as quickly as the Turkish Lira.”
A Central Bank official said many Turkish Cypriots hoarded the Cyprus pound because of its value. He could not, however, confirm whether it was the first time since 1974 that the pound was officially listed in Turkey. Economically, he said, the development was not important for the Republic. “They could be doing it because of trade with the occupied areas, as an indication for the Turkish Cypriots of how much they should get for their Cyprus pounds,” he said. “There is no other economic reason to recognise the Cyprus pound since we don’t have any trade with Turkey.”
A Greek Cypriot analyst urged caution on the political front.
“I don’t expect any fundamental changes from Turkey on Cyprus,” he said. “If that was the point I would have expected something bigger”.
The diplomatic source agreed. “I don’t think it’s a political thing. It’s just acknowledging that the Cyprus pound exists,” he said. “However it is interesting that they referred to it.”
