Turkey’s currency has continued to make significant gains on Dec. 23 after President Recep Tayyip Erdogan announced extraordinary measures that aim to safeguard deposits in the lira against volatility seen in recent weeks and boost confidence among Turks, Trend reports citing Hurriyet Daily News.
The lira firmed another 12% to 10.85 against the dollar, taking its overall weekly gains to more than 40%.
The Ministry of Finance and Treasury announced details of Erdogan’s measure Tuesday, 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.
Erdogan also promised exporters Monday that they would get foreign exchange forward rates from the Central Bank to mitigate volatility risks, and he increased the government contribution to private pensions from 25% to 30%.