During the Ottoman Empire, the issuance of banknotes coincides with the Reform Era (Tanzimat) when many other reforms were also put into effect. Until then, metal coins were in circulation such as nickel in the denominations of 5, 10, 20 and 40 paras; silver in the denominations of 2, 5, 10 and 20 kurush, and gold in the denominations of 25, 50, 100, 250 and 500 kurush. During the Tanzimat era, necessary steps were taken for regulating coins under a system called the "Law on the Union of Coins". It was also decided that banknotes be issued to meet the increasing requirements of the State to implement reforms and expenditures. The first banknote in the Ottoman Empire was issued during the reign of Abdülmecit in 1839. They were not banknotes in the true sense of the term but were more like treasury bonds which brought interest. These banknotes were not printed but were written by hand and bore an official stamp. The interest rate on these banknotes was 8%. They were valid for eight years and amounted to 160,000 liras. Since these banknotes could be easily copied, they began to be printed in 1842 and handwritten ones were exchanged for the printed ones. The banknotes issued during the reign of Sultan Abdülmecit (Kaime-i Nakdiye-i Muhtebere) were in circulation for 23 years. Banknotes were issued for a second time during the reign of Abdulhamit II in 1876. The new banknotes called "kaime", went into circulation under the supervision of the Finance Ministry and were sponsored by the Ottoman Bank, founded in 1863. The Ottoman Bank was the first institution which had the privilege of issuing banknotes. These banknotes in denominations of 5, 10, 20, 50 and 100 kurush bore the stamps of both the Finance Ministry and the Ottoman Bank. In Ottoman times, banknotes were issued for a third time during the First World War. These banknotes which amounted to 161 million liras in a total series of seven were later transferred to the Turkish Republic after 1915 under the name, 'Evrak-i Nakdiye' (cash documents).

Republican Era Banknotes

The 'Evrak-i Nakdiye' banknotes which amounted to nearly 153 million liras were transferred from the Ottoman Empire to the Republic and were used until 1927. The Turkish Republic which aimed at minting its own money, since it was the symbol of the sovereignty and independence of a state, decided to issue the first Turkish banknotes on 15 January 1925 under Law no:701, called "Exchange of Present Documents of Cash for New Ones". With this aim in mind, a committee formed under the chairmanship of Finance Minister Abdülhalik Renda decided to issue an E-1 series of banknotes in denominations of 1, 5, 10, 50, 100, 500 and 1000 liras. The main factor stressed in issuing new banknotes was to print them in such a way that they could not be counterfeited. With this aim in mind, the first banknotes were printed on watermarked paper and since the Latin alphabet had not been adopted, the Arabic script was used. It was believed that these banknotes bore international importance and therefore they were also printed in French.

The first Turkish banknotes printed by the 'Thomas de La Rue' company in Britain were put into circulation by the Ottoman Bank on 5 December 1927. Meanwhile on December 4, 1927,the 'Evrak-i Nakdiye' (cash documents) already in circulation, were withdrawn and lost all their value on 4 September 1928. Since the Republican Administration was determined to transfer the privilege of issuing banknotes from the Ottoman Bank established by foreign capital to a National Bank, the Turkish Grand National Assembly enacted Law 1715 on 11 June 1930 for this purpose. When the necessary preparations were completed, the National Bank began operating on 3 October 1931. With the establishment of the new Bank, the banknotes in circulation, amounting to 158.7 million liras were transferred to the Central Bank and in return, treasury bonds with a 1% interest rate were bought from the Government. As a result of the adoption of the Latin alphabet in 1928, the withdrawal of banknotes from circulation with the Arabic script began to be debated and as of 1937 new banknotes in Turkish printed in the Latin script were put into circulation by the Turkish Republic's Central Bank as an E-2 series. The banknotes put into circulation by the Central Bank were printed in the US, England and Germany until a banknote printing house was established in 1958.

The Banknote Printing House which minted the banknotes from 1958 onwards when it started operating, issued the VIth Emission Group in 1978 consisting of bills worth 1,000,000 Turkish Liras. Later the VIIth Emission Group consisting of bills worth 10,000 and 5,000 Turkish liras were printed. Currently, the Banknote Printing House has reached a contemporary level with the extensive experience necessary in making molds and designing original compositions. Bills worth 1,000,000 and 5,000,000 Turkish liras are prepared by the staff at the Banknote Printing House.

On January 1st, 2005, six zeros were dropped from the Turkish lira to erase the effects of several decades of high inflation in Turkish economy. The new currency is labeled "YTL" or Yeni Turkish Lira with trade value of approximately 1.4 US dollars to one YTL. The new Turkish banknotes look very much the same except for the six zeros and the YTL mark. Both currencies will be in use for one year of transition.

Reference: Newspot/BYEGM

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