Erdoğan’s Call To Citizens: Sell Dollars For Lira, Gold

President Recep Tayyip Erdoğan called on Turkish citizens on Dec. 2 to convert their foreign exchange into gold or the Turkish Lira, adding that there was no option other than cutting interest rates to spur growth.

Following his remarks in Ankara, the lira saw fresh lows against the U.S. dollar.

“Those who keep foreign currency under their mattress should come and turn them into lira or gold,” Erdoğan said in a speech to mark the opening of an automotive showroom complex in Ankara.

“Such moves will hurt some people’s game. Do not worry. We will destroy this game together. We saw such things in 2007 and 2008. I then said the problems would not affect Turkey. I am now saying the same thing. The problems will not even touch us,” he added.

He also voiced his criticism against high interest rates, saying there was “no option” other than cutting interest rates.

“We will open the way for investors with low interest rates,” the president said.

His position had previously raised tension between the Central Bank, which has kept the rates high to rein in inflation, and the government, insisting that rates should be lowered to make credit available to entrepreneurs.

“We should look at the world. Is the interest rate high in America, Japan, or Europe? While it is so low there, why are our interest rates wandering around 14, 15, or 16 percent? We will pave the way for entrepreneurs with low interest rates. High interest will only spur the financial sector, and I will also say this for public banks,” he said.

The lira fell to a record low of 3.55 against the dollar after he spoke. The Turkish currency is down some 17 percent against the dollar since the start of the year.

The government has said it will take measures to make it easier for state institutions to conduct transactions in liras rather than dollars and has urged private businesses to do the same in an effort to shore up the currency.

An economic slowdown is also a source of concern and fresh data painted a mixed picture.

The manufacturing Purchasing Managers’ Index (PMI) slipped to 48.8 in November from 49.8 in October, according to the Istanbul Chamber of Industry and IHS Markit, pointing to a contraction in activity on Dec. 1.

Meanwhile, Turkish exports rose 5 percent year-on-year in November to $11.95 billion and Istanbul retail prices rose 0.59 percent during the month, other data showed on Dec. 1.

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