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Friday, January 27, 2023

Turkish Lira Makes a Comeback With Recent Market Trends

After President Recep Tayyip Erdogan revealed a new strategy aimed at strengthening the currency, the Turkish lira has enjoyed a second day of strong gains.

It increased by as much as 15% in Tuesday trade after jumping by as much as 25% on Monday.

Mr Erdogan promised to repay savers for currency changes that have undermined the value of lira-denominated bank savings.

The currency has plummeted to new lows as the country’s cost of living increased by 21.7 percent.

However, it rose to little over 11 to the dollar at one point on Tuesday before sliding back somewhat.

Mr Erdogan has encouraged the central bank to keep reducing interest rates despite the price increases.

It cut borrowing charges from 15% to 14% on Thursday last week. It was the company’s fourth layoff in as many months.

Central banks often boost interest rates to battle increasing prices, but Mr Erdogan has dubbed such weapons “the mother and father of all evil.”

Lower interest rates, according to the president and his backers, increase Turkish exports, investment, and job creation. Many economists, though, believe the rate cuts are rash.

The government has agreed to compensate the difference between the value of lira savings and corresponding dollar deposits under the most recent measure.

“We’re giving a new financial option to residents who wish to assuage their fears about rising exchange rates while evaluating their savings,” stated the president.

“We will all witness how inflation begins to reduce within months as interest rates are cut,” he continued.

“This nation will no longer be a shelter for individuals who want to compound their money with high interest rates, and it will no longer be an import haven.”

According to central bank data, the lira is so distrusted that more than half of Turkey’s savings are held in foreign currencies and gold.

Cedric Blackwater
Cedric Blackwater
Cedric is a journalist with over a decade of experience reporting on local US news, and touching on many global topics. He is currently the lead writer for Bulletin News.

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