Mubasher: Turkish President Recep Tayyip Erdoğan asked Turks on Friday to exchange gold and US dollars into Turkish lira (TRY) after the national currency stumbled more than 14%.
“If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks,” Erdoğan told a crowd in the north-eastern city of Bayburt, adding that as the country is facing “a national, domestic battle, this will be my people’s response to those who have waged an economic war against us.”
The lira saw briefly a steep decline of 14.6%, marking the largest one-day drop since early 2001, before paring loses on worries on the Turkish president’s influence over monetary policy and worsening relations with Washington.
The lira sell-off intensified concerns about exposure to the country, in particular, the ability of over-indebted firms to pay back loans in euros and US dollars, following years of overseas borrowing to fund a booming construction activity.
Investor worries were also heightened with the Turkish president’s defiance in the face of the crisis, through appealing to the people’s patriotism.
In the same vein, US President Donald Trump has authorised higher tariff on imports from Turkey, levying 20% and 50% tariffs on aluminium and steel.
On a side note, recently appointed Finance Minister Berat Albayrak, Erdoğan’s son-in-law, recognised that the central bank’s independence was vital for the Turkish economy, pledging a stronger budget discipline and prioritising structural reforms.
By 3:11 pm GMT, the USD/TRY pair went up 14.53% to TRY 6.3570.