In December 2021, Erdogan fired Lutfi Elvan from his post as finance minister amid the depreciation of the lira. The Turkish lira was trading at 7.4 lira per dollar in January 2021. Over the year, it has fallen in price by 60%, and lost more than 40% of its value in December. Thus, the exchange rate fell to a historic low. Reuters wrote that in recent years, the Turkish lira has shown worse results in comparison with the currencies of other developing countries.
Due to rising inflation, Erdogan announced new measures to reduce the volatility of the lira. “From now on, none of our citizens will need to transfer their deposits from the Turkish lira to foreign currency due to fears that exchange rate fluctuations could negate profits from interest payments,” he said, noting that if the income on a deposit in lira will be lower than at the current dollar rate, citizens will be compensated. He called on the people who have savings in dollars to convert them into lira to support the national economy.
Erdogan assured that volatility could soon stop, and then inflation in the country would fall within a few months.
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