Er­do­gan calls on Turks to do more to boost cur­rency

Kuwait Times - - BUSINESS -

ISTANBUL:

Pres­i­dent Re­cep Tayyip Er­do­gan urged Turks yes­ter­day to step up ef­forts to boost the Turk­ish lira by con­vert­ing more for­eign cur­rency, as the cam­paign launched ear­lier this month showed only lim­ited ef­fect. Er­do­gan has spear­headed a na­tional effort to boost the na­tional cur­rency, call­ing on peo­ple to change money “un­der their pil­low” af­ter the lira lost al­most 20 per­cent in value so far in 2016. “I thank my peo­ple very, very much. But is it enough? It is not. I think my peo­ple should push this more,” he told re­porters in Istanbul.

Since his call on Dec 2, Turks across the coun­try have ral­lied to sup­port the ail­ing cur­rency through in­cen­tives while state in­sti­tu­tions have con­verted as­sets into lira in­clud­ing the de­fense in­dus­try sup­port fund. In the lat­est move, Istanbul mu­nic­i­pal­ity said it was con­vert­ing some $42 mil­lion of as­sets held in US cur­rency into Turk­ish lira. Some lo­cal busi­nesses have made head­lines by of­fer­ing free wed­ding pack­ages, ke­babs, shaves and even a grave­stone for chang­ing money.

But economists doubt such moves will have a sig­nif­i­cant long-term im­pact in the face of po­lit­i­cal un­cer­tainty and con­cerns over the al­ready frag­ile econ­omy. The lira ral­lied briefly ear­lier this week but has lost ground over the last two days and was trad­ing on Fri­day at 3.47 to the dol­lar, a loss in value of 1.2 per­cent on the day. Inan Demir, econ­o­mist at No­mura In­ter­na­tional, said that Prime Min­is­ter Bi­nali Yildirim had dis­ap­pointed mar­kets on Thurs­day by fail­ing to an­nounce sus­tained and con­crete mea­sures to sup­port the lira.

“In our view, the au­thor­i­ties’ re­sponse to the ex­change rate devel­op­ments have been un­der­whelm­ing so far,” he said in a note to clients. — AFP

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