Erdoğan: New deposit instrument achieved goal to strengthen lira

Photo: AA

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Introduced by the government a couple o days ago, the "foreign exchange-protected deposit" instrument has achieved its goal, President and Justice and Development Party (AKP) Chair Recep Tayyip Erdoğan said yesterday (December 21).

No citizen will have to move their savings from the Turkish lira to foreign currency anymore, Erdoğan said after chairing a cabinet meeting in the capital city of Ankara.

The government is presenting a new financial alternative for citizens' savings to soothe their worries over rising exchange rates, said Erdoğan.

"For exporting companies that find it difficult to present prices due to fluctuations in foreign exchange rates, they will be given an exchange rate in the future through the Central Bank," he explained.

He also said stoppage (deductions) on companies' dividend payments will also be lowered to 10 percent.

The state subsidy rate on the personal pension system will be raised significantly from 5 percent to 30 percent in order to boost its appeal, he said.

Lira gains ground

Erdoğan's remarks seemed to be welcomed by the Turkish lira, as afterwards it gained strength against the US dollar.

The new measures come in the wake of rising prices and soaring exchange rates as the government pursues its "new economic model," which stresses opposition to high interest.

Erdoğan also said there will be a new instrument to help people who might invest in foreign exchange get the same results while sticking to the Turkish lira.

"Investors will be encouraged to move towards Turkish lira-based assets by issuance of government bills that are indexed to public economic enterprise revenues that are transferred to the budget," he explained. (AÖ/VK)