Erdogan compares run on lira to Turkey’s fight with Daesh

Turkish President Recep Tayyip Erdogan drew parallels today between Turkey’s battle against Daesh militants in Syria and efforts to shore up the lira, urging citizens to continue selling dollars and blaming speculators for the lira’s decline.

Erdogan has called for Turks to convert foreign currency into gold or lira after the currency saw its worst month in November since the 2008 financial crisis, hit by a strong dollar and concern about political stability after July’s failed coup.

“Our economy is being targeted through foreign exchange speculation,” Erdogan said in a speech to provincial administrators in the presidential palace in Ankara, adding that he saw no financial reason for the currency’s latest slide.

“There is no difference between Turkey’s Al-Bab operation and the efforts to stop forex speculation,” he said, using an abbreviated term for foreign exchange markets.

Erdogan was also referring to Turkey’s military presence in northern Syria, where it is backing a group of Syrian rebels in an effort to clear Daesh and separatist Kurdish militants from its border.

Erdogan accused currency speculators and Ankara’s military opponents of trying to “divide and destroy” Turkey.

Turks rally to Erdogan’s call

Barbers, restaurants, gold sellers and stonemasons were among those who responded to Erdogan’s call by offering free goods and services to citizens with proof of having converting their dollars to lira.

“If you love this country, if you love this people, my friend, you should switch to Turkish lira,” Erdogan said.

Turkey’s defence ministry became the latest institution today to answer Erdogan’s call saying it had converted into lira $262.7 million and 31.3 million euros ($33.5 million) held by the defence industry support fund.

Broadcaster NTV reported that energy market regulator EPDK had decided to hold natural gas distribution tenders in lira instead of dollars. The Istanbul Stock Exchange said that last week it had converted all of its cash assets to lira, but did not give an amount.

The lira has lost as much as one fifth of its value against the dollar this year, but rebounded sharply yesterday and is now down some 15 per cent since the start of the year against the US currency, standing at 3.42 per dollar at 12:00pm GMT.

In another step to support the currency, the final 657 million euro ($704 million) tranche to be paid by telecoms operators who won a 4.5G mobile phone frequencies tender will be made in lira, Reuters cited an official familiar with the matter as saying.

Erdogan repeated that Turkey was now also in talks to allow commerce with China, Russia and Iran to be conducted in local currencies rather than relying on the US dollar, seen as the currency of choice for international commerce.