(Bloomberg) -- The Turkish lira extended gains to over 15% against the U.S. dollar, after President Recep Tayyip Erdogan announced extraordinary measures to bolster the currency late Monday.
The lira was trading 15.1% higher at 11.3165 per dollar as of 9:15 a.m. local time on Tuesday, after gaining as much as 16.4%. The currency swung from a record low of 18.3633 per dollar early on Monday, staging its biggest daily rally since at least 1983, according to data compiled by Bloomberg.
Erdogan Unveils Extraordinary Steps to Bolster Lira, Savings
Erdogan’s government announced measures including the introduction of a new program that will protect savings from fluctuations in the local currency. The government will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed interest rates promised by banks, Erdogan said after chairing a cabinet meeting in Ankara.
Prior to Monday’s rebound, the lira had lost about half of its value against the U.S. dollar since September, with declines gaining pace after Erdogan last month unveiled an economic model that relies on lower borrowing costs and a cheaper currency. Erdogan has said Islam demands lower rates.
The central bank has slashed the one-week repo rate by five percentage points since September, in line with Erdogan’s demands. The monetary authority has also intervened in the foreign-exchange market four times this month to stop the currency depreciation.
(Updates with new lira reaction, details)
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