The lira , which was down more than 10% at 18.4 to the dollar earlier, strengthened sharply and ended up 25% on the day at 13.15 in reaction to Erdogan’s announcement, in its largest daily trading range on record.
“The most important piece is that the government says that it will make up for losses in lira deposits if the lira declines exceed interest rates promised by banks.
As a Muslim, whatever requires I will continue to do that,” he said, referring to Islamic finance in which high interest, or usury, is typically avoided.
In an attempt to slow the selling and address what it called “unhealthy” prices, the central bank has intervened five times this month, though there was no official indication of intervention on Monday.
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