Erdoğan repeats call for Turkish citizens to sell dollars

KAYSERİ

AA photo

President Recep Tayyip Erdoğan has repeated his call on citizens to convert their foreign exchange into gold or the Turkish Lira, claiming that “some circles” that could “not destroy Turkey by tanks and rifles” are now trying to hit the country economically. 

“Those who keep dollar or euro currency under their mattress should come and turn them into liras or gold,” Erdoğan said in a speech in the Central Anatolian province of Kayseri on Dec. 4. 

He added that several steps had been taken by the Turkish authorities to promote shopping on a lira basis rather than other currencies. 

“Now it is time for trade. Our prime minister [Binali Yıldırım] will go to Russia tomorrow. He will hold key meetings with Russian officials the following day. We will soon take steps to conduct our bilateral trade with Russia with our own currencies,” Erdoğan said, adding that similar steps would also be taken with China and Iran. 

The president first made his call for Turks to sell foreign exchange and buy gold or liras on Dec. 2, also claiming that there was “no option other than cutting interest rates to spur growth.”

Turkey’s main stock exchange, Borsa Istanbul, became the first institution to convert all its cash assets into the lira a few hours after Erdoğan’s remarks. 

Borsa Istanbul said in a written statement on Dec. 2 that it would convert all of its cash assets into liras and keep them in lira accounts.

All eyes will be on foreign exchange rates this week to see whether new measures to support the struggling lira will be announced, and to see whether steps to ease the steep fluctuations work. 

The Turkish currency, which has lost nearly a fifth of its value this year, booked its worst monthly performance since the 2008 financial crisis last month, hammered by a resurgent U.S. dollar and domestic concerns.

The lira fell to a record low of 3.60 against the dollar on Dec. 2, before seeing some rebound after a general decline in the dollar in global markets. The coming weeks will be crucial for the lira ahead of a key Fed meeting on Dec. 14 as well as key domestic developments, including constitutional amendment moves. 

Top officials have announced a number of measures to ease the pressure on the lira. 

Yıldırım said the government and the Central Bank have been taking necessary measures to ensure that the country suffers only minimal effects from the recent “temporary fluctuation” in the economy, ahead of an economic coordination board (EKK) meeting late on Dec. 2. The results of this meeting are expected to be announced this week.