×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: Turkey | Economy

Turkish Lira Rebounds after Erdogan Promise to Help Deposits

Tuesday, 21 December 2021 04:00 AM EST

ISTANBUL (AP) — The Turkish lira was making significant gains Tuesday after the country’s president announced new measures to safeguard deposits in the national currency against currency fluctuations.

The lira hit an all-time low of 18.36 against the U.S. dollar Monday but rebounded to a high of 11.09 Tuesday morning. It was trading at 13.75 at 0820 GMT Tuesday.

The currency has been on a rollercoaster ride since the central bank began lowering interest rates in September and saw extreme volatility in the past weeks when the lira kept hitting record lows.

President Recep Tayyip Erdogan said Monday the government would cover losses incurred by lira deposit holders in cases where the lira’s depreciation against foreign currencies exceeds the banks’ interest rates.

“From now on, our citizens won’t need to switch their deposits from Turkish lira to foreign currency, fearing that the exchange rate will be higher,” Erdogan said Monday.

The extraordinary measure is aimed at boosting confidence among Turks about their currency after many flocked to foreign currencies and gold to hold on to their savings amid massive fluctuations and soaring consumer prices.

The weakened lira was driving prices higher, making imports, fuel and everyday goods more expensive. Many people in the country of more than 84 million are struggling to buy food and other basic needs.

But critics say the measure is unsustainable and could cause more inflation.

Turkey’s president is avowedly against high interest rates and believes they cause inflation, a thought that stands in contrast to established economic principles. He bases his theory on Islam.

Under his assumed influence, the central bank has lowered interest rates by five percentage points since September to 14 percent despite official inflation running at 21 percent.

Erdogan also promised exporters Monday they would get foreign exchange forward rates from the central bank to mitigate volatility risks, and increased government contribution to private pensions from 25 percent to 30 percent.

On Monday’s record low of 18.36, Turkey’s currency had lost more than 60 percent of its value against the dollar this year. The head of the Turkish Banks Association, Alpaslan Cakar, told Turkish broadcaster Haberturk late Monday that 1 billion U.S. dollars had already been converted to liras after Erdogan's announcement.

© Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


GlobalTalk
The Turkish lira was making significant gains Tuesday after the country's president announced new measures to safeguard deposits in the national currency against currency fluctuations.The lira hit an all-time low of 18.36 against the U.S. dollar Monday but rebounded to a...
Turkey,Economy
369
2021-00-21
Tuesday, 21 December 2021 04:00 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
© Newsmax Media, Inc.
All Rights Reserved