HRF’s Weekly Financial Freedom Report #51

Turkey | Lira Banknotes Stripped of Value

In Turkey, after years of state-driven double-digit inflation, the purchasing power of its largest banknote has collapsed. The 200 lira note, once worth $140 in 2010, is worth just $5.80 today. This depreciation makes the note increasingly impractical for daily expenses, as it is barely enough for two cups of coffee. Additionally, smaller denomination banknotes are so unsuitable for daily expenses that they have essentially become scraps, as 200 lira notes make up 80% of all cash in circulation (up from 16% in 2020). In a cash-centric country like Turkey, some bank branches now need to refill their tellers three times a day, while ATMs are increasing withdrawal limits and are expected to stop offering notes below 100 lira. This financial strain is reminiscent of the 1990s, when runaway inflation devastated citizens’ savings and forced the Turkish government to remove six zeros from the currency in order to create the Turkish lira used today.

Nicaragua | Journalist Arrested for Criticizing Rising Cost of Living

The National Police arrested Nicaraguan journalist Elsbeth D’Anda last month for criticizing the rising cost of living on his television program La Cobertura. The regime loyalists deployed 20 officers and detained D’Anda at his home, confiscating his equipment before taking him to the notorious El Chipote prison. Several press freedom organizations have condemned the arbitrary detention as an attack on free expression. This arrest is the latest addition to a series of repressive measures by the Sandinista regime, which has crushed independent media through shutdowns, exiles, intimidations, and persecutions.

China | Expels Former Head of CBDC Project 

The Chinese Communist Party (CCP) expelled Yao Qian, the former head of China’s central bank digital currency (CBDC) project, from his government position over allegations of corruption. Accused of accepting bribes in the form of digital assets, real estate, and luxury goods, Yao reportedly abused his role to favor specific technology providers for personal gain. His removal draws attention to the questionable governance of China’s CBDC, which already faces extensive criticisms regarding privacy and censorship. Qian’s case accentuates the risks of centralized systems, where unchecked power can foster corruption. As China advances its CBDC for cross-border transactions, this case foreshadows the broader implications of centrally controlled money in the hands of authoritarian regimes.

Russia | ‘War Economy’ Causing Inflation in Essential Items

As Russia continues its affront on Ukraine, its economy is experiencing a sharp rise in the prices of essential goods, leaving everyday citizens grappling with an escalating cost of living. Putin’s record defense spending, set to hit $138 billion in next year’s budget, has pushed inflation to 8.5%, with goods like butter rising as much as 26%. “You can’t fight inflation and a war at the same time,” says Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin. Meanwhile, the regime is cracking down on alternative assets, banning Bitcoin mining in several regions, including Siberia and occupied territories of Ukraine, leaving fewer options for citizens to protect their savings and autonomy.

DR Congo | Proposed Constitution Change Prompts Outcry

In the DRC, opposition leaders are mobilizing nationwide protests against President Felix Tshisekedi’s plan to draft a new constitution, fearing it will extend presidential term limits and erode other democratic processes. Tshisekedi openly criticizes the constitution as outdated and obstructive to his governance, while opposition figures argue it prevents authoritarianism and ensures peaceful transitions of power. Concerns over constitutional changes are not unfounded in a country with pervasive repression and censorship. The DRC has laws restricting freedom of expression, such as banning government criticism in songs. It also uses financial policies like limiting electronic payments to Congolese francs to prop up its currency. With more than 25 million people facing food insecurity and economic freedom ranking among the lowest globally, Tshisekedi’s plan will only further entrench authoritarian rule at the expense of citizens’ rights.