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Lira in freefall as Erdoğan urges Turks to sell off forex

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An economic crisis will only slightly affect Turkey if fellow citizens convert their foreign currencies into Turkish lira or gold, President Recep Tayyip Erdoğan said on Friday.

Yet his remarks have failed to prevent the local currency from hitting a new record low against the US dollar, depreciating some 3 percent in half a day alone.

Having hovered at around 3.487 early in the morning, the lira had fallen to around 3.5935 against the greenback bymid-day. The currency also weakened to as low as 3.80715 against the euro the same day.

“They have been talking about a currency issue very recently. Those who save foreign currencies under the pillow should convert them into gold or lira. Let’s do that and not help foreign currencies rise,” the president said at a gathering on Friday.

“I am reminding you again. The crisis will only slightly touch us,” he said, echoing his remarks back in 2008 when the global economy was hit by a major crash in the US that expanded quickly to the rest of the world, with some countries including Turkey less affected than others.

Since the outspoken presidential candidate Donald Trump surprisingly won the election in the US in early November, emerging currencies have been in decline on expectations that the new president will bring investments home and keep interest rates high.

However, Turkey’s currency has also been struggling due to local dynamics including a military coup attempt in mid-July and the ensuing purges that have sparked concern on the part of human rights advocates around the world.

The lira has lost some 17 percent of its value against the US dollar since the beginning of 2016.

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