Mahmud Gorgan, Deputy Minister of Treasury and Finance of Turkey, revealed the volume of local currency deposits according to the new financial mechanism, which has exceeded 100 billion liras since the mechanism was announced last December.
In his speech, Monday, during an economic meeting of the Justice and Development Party branch in Istanbul, Gorgan said that the volume of local currency deposits according to the new financial mechanism amounted to 107.6 billion liras, by the seventh of January.
Gorgan added that while the volume of local currency deposits was 28.2 billion pounds on December 24, it rose to 107.6 billion by January 7.
He pointed to the great interest that the new financial mechanism has received, Anadolu Agency reported.
Last December, Turkish President Recep Tayyip Erdogan revealed a new economic mechanism aimed at protecting the Turkish lira, which had fallen to record levels against the US dollar.
After the disclosure of the new financial mechanism, the lira, which had fallen earlier by more than 11%, rose to about 18.4 against the dollar, to reach the dollar 10.40 liras, before falling slightly.
It is noteworthy that the mechanism called “the Turkish lira deposit protected from exchange rate fluctuations” guarantees the lira depositor not to fall victim to exchange rate fluctuations, and to obtain the declared interest, in addition to the difference in the dollar price between the time of deposit and withdrawal.
The disclosure of the new financial mechanism came after the lira fell significantly against the dollar, after the country’s central bank reduced the interest rate for four consecutive times, from 19 percent to 14 percent.
Erdogan publicly rejects high interest rates because he believes they increase inflation, and he has previously described them as “the mother and father of all evil”, looking forward to reducing the annual inflation rate to 5% by the next elections scheduled for 2023.
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