New economic model will lead to lower inflation: Erdoğan

ANKARA

Turkey's new economic model will lead to lower inflation, said President Recep Tayyip Erdoğan during an interview on Dec. 24. 

Since the new economic plan was announced, lira bank deposits grew 23.8 billion Turkish liras ($2.2 billion) Erdoğan told broadcaster ATV. 

These developments showed that all of Turkey’s citizens should trust in the lira, he added.

The Ministry of Finance and Treasury announced details of Erdoğan’s measure earlier in the week, saying losses by lira deposit holders would be covered in time deposit accounts of three, six, nine and 12 months with interest rates matching or above the Central Bank’s policy rate.

In a statement, the ministry said exchange rates for the beginning and the end of the deposit would be compared and the higher number would be considered for the calculation of potential losses. Any bank that wants to join the system would be allowed to do so and the daily U.S. dollar rate to be considered would be announced each morning.

Erdoğan said the citizens have two guarantees, one from the Turkish Central Bank and the other from the Treasury.

"FX rates will stabilize in a very short period of time," he also noted.