Turkish President Recep Tayyip Erdogan on Friday urged Turks to convert their foreign money into gold and Turkish lira to stimulate the country’s economy, as Turkey’s currency continued its slide against the US dollar.
“For those who have foreign currencies under the pillow, come change this to gold, come change this to TL [Turkish lira]. Let the lira win greater value. Let gold win greater value,” he said during a televised speech in Ankara.
“What necessity is there to let foreign currency have greater value?” he asked.
Photo: Presidential Press Service via AP
However, the lira lost value against the US dollar as he delivered his speech, reaching lows of 3.51.
Later, Borsa Istanbul said it would convert all of its cash assets into lira “in support of [Erdogan’s] call,” leading the lira to make up some of its losses against the greenback after it reached record lows of 3.58.
The lira was at 3.50 against the US dollar at about midnight on Friday, down 0.30 percent on the day in another volatile 24 hours for the currency.
Last month alone, the lira hemorrhaged more than 10 percent of its value against the dollar.
Erdogan also suggested that there were forces “playing games” against Turkey, which Turks could counter by changing their money.
“Don’t worry, in a short while, we will destroy this game,” he said.
The Turkish currency was also reacting to Erdogan’s repeated insistence on lowering interest rates because, he claims, there is “no other remedy.”
He pointed to the US, Japan and Europe as examples of economies where rates are low and questioned why Turkey still had such high rates. After several rate cuts earlier this year, the central bank stepped in with an unexpected hike of 50 basis points in its leading rate last month.
However, concerns over Turkey’s political instability, including the government’s race to expand Erdogan’s powers, as well as its fractious relationship with the EU, meant a rally in the Turkish currency was short-lived after the bank’s announcement.
Worries over Erdogan’s influence grew after Turkish Prime Minister Binali Yildirim on Thursday said that the government would next week propose a bill to the Turkish Grand National Assembly that would change the constitution and hand the president increased powers.
The economy’s fragility and the lira’s decline seem to not have gone unnoticed by the government, with its economic coordination committee meeting for five hours on Friday night in Ankara.
In a statement reported by local media after the meeting ended, the committee said it decided on several measures to support public finances and the banking and finance sector, as well as the property and labor markets — but gave no further details of its decisions.
It said “technical studies” would be undertaken before it publicly shares the measures next week.
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