“We have broken the foreign exchange bubble,” said Turkish President Recep Tayyip Erdogan, as he took action this week to protect pound deposits from volatility.
“We saw the exchange rate bubble burst in one day, with our package of measures,” Erdogan said.
He added that the government went ahead with its economic plan of low interest rates despite the reactions.
After a meeting with economists and academics, Erdogan stressed that the Turkish economy will enter a very different environment in the summer, thanks to the “new economic model.
The Turkish pound sank to a new low of 18.4 against the dollar, after months of unorthodox interest rate-cutting policies and fears of an inflation spiral.
Erdogan then announced a scheme in which the finance ministry and the central bank would compensate for the losses suffered by the pound deposits, thus starting the largest intra-conference rally in the history of the currency.
He said today that he expected businesses and retailers to cut prices after the pound recovered, including car and house prices, adding that the government would identify those who did not.
While his plan to defend pound deposits has given Turkish savers some respite and possibly paved the way for early elections – it also risks accumulating debt and intensifying inflationary pressures.
.
Source From: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
