Turkish lira sees volatile trade on Erdogan plans

Turkey's lira saw more volatile trading on Tuesday (December 21).

That after the currency saw a historic rebound from record lows in the previous session.

On Monday (December 20), President Tayyip Erdogan unveiled a plan he said would ease the burden of a weakened currency on Turks and encourage them to hold lira rather than dollars.

"I am saying from here, whoever thinks they can steer our country towards outdated economic models, make us turn back with the exchange rate speculations, an excessive price game, interest rates pressure, and by turning global developments upside down is wrong."

The government promised to guarantee deposits in lira.

That helped send the currency soaring 25% - its biggest intra-day rally on record.

But some experts have warned the Treasury would need to meet the costs of the measures - which could be an expensive and inflationary initiative.

In Istanbul, locals gave their thoughts on the latest move.

"Some people maybe convinced (with latest steps) and they exchanged their dollars to Turkish lira. But we don't know how long it goes, everything remains uncertain."

"It was 12 lira versus the dollar when I saw it on TV this morning, but it jumped to 15 lira until I came here. I guess it will be around 18 lira when I get home. So, what was the meaning of all this?"

Another senior banker said infrastructure and regulation would have to be introduced before the deposit guarantee could be implemented.

The lira plunged to record lows this year over fears of an inflationary spiral brought on by Erdogan's push for monetary easing.

At its lowest, it was down some 60% on the year.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting