Turkish lira continues strong recovery positively | Financial

With the intervention, the president wants to prevent Turks from converting their savings into dollars en masse, so that the exchange rate of the lira only plummets further. However, he did not disclose how he would fund the potentially expensive and price-increasing initiative.

Before the president’s announcement, the lira had fallen more than 10 percent to an all-time low against the US dollar.

Then the lira shot back. The largest daily profit was made for the currency since 1983. One euro now has to pay 14 liras compared to 19 liras a few days ago.

According to the calculations of three bankers, about $1 to 1.5 billion in savings were converted into lira Monday night. The Turkish Banking Association said about $1 billion was sold in the markets.

The lira has fallen to record lows this year on fears of rising inflation, which in turn is the result of Erdogan’s push for monetary easing. In the past month alone, the coin lost 40 percent of its value. At its lowest point, the currency was worth 60 percent less than a year earlier.

The rapid rebound was set in motion by the promise of a deposit guarantee. This will prevent Turks from converting their savings into hard currency, Erdogan said. Some economists argue that the new measures are in fact disguised rate hikes, but they are not without risk for the treasury.

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