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The publication of Recep Tayyip Erdogan’s plan, which pledged to guarantee local currency deposits against market fluctuations, has given wings to the Turkish lira, which immediately marked a 15 percent appreciation, continuing its historic recovery after record lows.
The Turkish currency strengthened by trading at 11.09 units per US dollar, Reuters says.
In a speech late Monday, the Turkish president said a series of steps would ease the burden on the currency and encourage Turks to keep savings in lira rather than dollars. He did not elaborate on how the government would fund the potentially expensive and inflationary initiative. The Turkish Banking Association said about $ 1 billion was sold in the markets after the Turkish president announced it.
According to estimates by three bank workers, about $ 1 billion to $ 1.5 billion in savings were exchanged for lira on Monday evening. The lira has fallen to an all-time low this year amid fears about the government’s interest rate cut plan, and last month alone lost about 40 percent of its value.
The government has hailed the free recovery as a major victory, but economists have called the government’s low-interest economic plan reckless and said inflation, which is currently above 21 per cent, would rise to 30 per cent. percent next year.
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