15% jump for the Turkish pound after the Erdogan plan

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The Turkish pound jumped 15% against the dollar, extending its historic recovery from the low it was at, as President Erdogan unveiled a plan that stressed he would guarantee local currency deposits against market fluctuations.

The currency fell, then strengthened in a volatile session, at 11.0935 against the dollar, from closing yesterday at 13.15 pounds.

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In a speech late Monday night, Erdogan said a series of measures would reduce the burden of the monetary collapse of recent weeks, and encouraged Turks to keep their savings in pounds instead of dollars.

He did not provide details on how the government would fund this potentially costly and inflationary initiative.

Prior to the announcement, the pound fell more than 10% to a record low of ,4 18.4 against the dollar.

Later it reached 12 pounds – in the largest intra-conference rally – to close the day with a rise of 25%.

About $ 1 billion was sold in the markets after his announcement, according to the head of the Turkish Banks Association. According to estimates by three bankers, about 1-1.5 billion dollars in savings were converted into pounds on Monday night.

The rapid recovery was prompted by Erdogan’s promise to guarantee deposits, which he said would prevent Turks from converting savings into hard currencies.

“We are presenting a new alternative to citizens who want to allay their concerns about rising exchange rates when valuing their deposits,” Erdogan told a cabinet meeting, reiterating his support for a low-level policy. , from which the fall of the pound began.

While the government has hailed the pound recovery as a major victory, economists have called its low-interest-rate economic plan reckless, saying inflation will soar to 30% next year.

Source: Capital.gr

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