President Recep Tayyip Erdogan has urged Turks to keep all their savings in lira, arguing that the recent exchange rate volatility was largely under control after the country's national currency weakened sharply over the past few months.
Addressing a business group in Istanbul on Friday, Erdogan said that he wants “all Turkish citizens to run all their business with” the country’s “own money” and that he would “recommend this”.
In this Wednesday, Aug. 15, 2018, file photo a worker at a currency exchange shop exhibits Turkish lira banknotes bearing pictures of modern Turkey's founder Mustafa Kemal Ataturk, in Istanbul.(file photo)
© AP Photo / Lefteris Pitarakis
"Let's not forget this: as long as we don't take our own money as a benchmark, we are doomed to sink. The Turkish Lira, our money, that is what we will go forward with. Not with this foreign currency, that foreign currency”, the president asserted.
He also called on Turks to bring their gold savings into the banking system, reiterating his unorthodox view that interest rates were the cause of inflation.
"For some time, we have been waging the battle of saving the Turkish economy from the cycle of high interest rates and high inflation, and taking it on the path of growth through investment, employment, production, exports and current account surplus. Interest rates down, interest rates up. My friends, let us please take this out of our books. Interest rates make the rich richer and the poor poorer”, Erdogan claimed.
He spoke a few weeks after the Turkish lira crashed seven percent, falling to a record of almost 15 to the dollar, amid concerns over Erdogan’s new economic policy and prospects of another interest rate cut.
The fall was the latest in a series of such slumps in the past three years, which reignited fears about Turkey’s high external debt and the central bank's shrinking liquidity.
Last year, the Turkish president attributed permanent drops in the exchange rate of the national currency to fluctuations on the financial market.
“Such fluctuations happen, rates move in zigzags. Everything will fall into place”, Erdogan told reporters. He also argued that the national economy had become healthier since his party came to power in 2002 and blamed "enemies abroad" for stoking fears inside the country.
In November 2019, the president called on Turks to convert their foreign currency to Turkish lira, asking them to abandon the dollar.
"Leave the dollar and the rest. Let's turn to our money, the Turkish lira. The Turkish lira doesn't lose value anymore. Let's show our patriotism like this”, he said.