Turkey: Tayyip Erdoğan announces moves to encourage savings; Lira makes gains

Turkey

Turkish President Recep Tayyip Erdoğan announced a series of moves to encourage savings. He also said that no Turkish citizen will have to move their savings from the Turkish lira to foreign currency for a living. He said the government would offer a new financial vehicle for the citizens to protect them from the high cost of living. 

During a Cabinet meeting in the capital Ankara on Monday, Erdoğan said that Turkish lira deposit holders would be compensated for their losses from the decline of the currency Lira. Turkish Lira has fallen by 50 per cent this year. Turkish citizens were worried because of the inflation rate.

Reportedly,  the inflation rate crossed more than 21 per cent in November. People also cut down on meat because of the situation. Some people who could afford to travel fled to Europe for a better life. It was hard for them to live in Turkey amidst the inflation. 

Condition of the people in Turkey

The weakened lira is driving prices higher of commodities, making imports, fuel and everyday goods more expensive. Consequently, it is hard for people to survive and afford basic needs. According to Euro News, many people in the country are struggling to buy food and other basic needs.

According to WION, the Turkish voters were gearing up to get rid of  Erdoğan in 2023 amid the economic downturn.  Erdoğan has long argued that high-interest rates cause inflation, contrary to conventional economic thinking. He always said to keep the rates low. He prioritized growth, exports and employment over inflation rates. 

Earlier, on Sunday,  Erdoğan said that he can’t keep the rates low, citing Islamic teachings against usury. He also said, “Don’t expect anything else from me.” Subsequently, he said to bring inflation down to 4% as his government has done in the past.