Erdogan Urges Turks to Exchange Gold as Lira Plummets to Record Low

Erdogan Urges Turks to Exchange Gold as Lira Plummets to Record Low

Friday, 10 August, 2018 - 18:00
A money changer counts Turkish lira bills at a currency exchange office in central Istanbul, Turkey. (Reuters)
Asharq Al-Awsat
The Turkish lira plummeted to record lows against the dollar on Friday prompting President Recep Tayyip Erdogan to urge Turks to exchange gold and hard currency into the national currency.

Deeping it a “national battle” against economic enemies, he told a crowd in the northeastern city of Bayburt: “The dollar cannot block our path. Don’t worry.”

“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.”

In a day of extraordinary volatility the lira lost as much as 20 percent, crashing to a record low of 7 to the dollar, before paring losses to trade at 6.36 at 1513 GMT.

The lira has now lost around 40 percent this year on worries about Erdogan's influence over monetary policy and worsening relations with the United States - a relentless slide which turned to meltdown on Friday.

President Donald Trump stepped up the pressure by doubling tariffs on Turkish metal imports, in the latest round of a dispute focused around the terrorism trial in Turkey of a US evangelical pastor whose freedom Washington is demanding.

The two countries are also divided over the detention of three locally employed US consular staff, Washington’s sanctions on Iran, Turkey’s plans to buy a Russian missile defense system, and their military interventions in Syria.

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 US-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.

“Don’t get too excited...You will not be able to topple this nation,” he told the crowd of supporters in Bayburt.

Not everyone in Turkey shared Erdogan’s confidence. The main opposition Republican People’s Party (CHP) leader, Kemal Kilicdaroglu, said imprudent government policies meant Turkey had to borrow to pay off the interest on existing debt.

“The lira is melting like a candle against the dollar,” he tweeted.

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