Istanbul (August 10, 2018): President Tayyip Erdogan told Turks to exchange gold and hard currency into lira on Friday as part of a “national battle” against economic enemies he said have irreparably ruptured ties with Ankara.
The lira has long been falling on worries about Erdogan’s influence over monetary policy and worsening relations with the United States. That turned into a rout on Friday, with the lira diving as much as 18 percent at one point, the biggest one-day drop since Turkey’s 2001 financial crisis.
The lira, which has lost more than 40 percent this year, hit a new record low after Trump took steps to punish Ankara in a wide-ranging dispute. He said he had authorized higher tariffs on imports from the United States’ NATO ally, imposing duties of 20 percent on aluminum and 50 percent on steel.“The dollar cannot block our path. Don’t worry,” Erdogan told a crowd in the northeastern city of Bayburt.
“However, I say it once again from here, if there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks. This is a national, domestic battle,” he said.
“This will be my people’s response to those who have waged an economic war against us.”Erdogan’s comments offered no support for the currency, which fell as he spoke. A nearly hour-long presentation on Turkey’s new economic policy by Treasury and Finance Minister Berat Albayrak – Erdogan’s son-in-law – also did little to limit the currency’s free-fall.
Without naming countries, Erdogan said supporters of a failed military coup two years ago, which Ankara says was organized by a U.S.-based Muslim cleric, were attacking Turkey in new ways since his re-election two months ago.
“Some countries have engaged in behavior that protects coup plotters and knows no laws or justice,” Erdogan said. “Relations with countries who behave like this have reached a point beyond salvaging.”Turkey was facing artificial financial volatility, Erdogan said, and people should look to the “big picture” instead of foreign exchange prices.
Turkey had made important progress with other countries, he said, naming Iran, Russia, China and “some European countries”, Erdogan said, adding that increasing production, exports and employment was the best response to the country’s challenges.
“Don’t get too excited…You will not be able to topple this nation,” he told the crowd of supporters in Bayburt.