Turkey’s Savings Deposit Insurance Fund (TMSF) announced on Friday it would convert its assets in foreign currency to the Turkish lira as part of a plan to help the Turkish economy by boosting faith in the lira.
“It is believed that the latest fluctuations in the value of the Turkish lira were not caused by problems in the economy,” an official TMSF statement said.
“According to our decision, our fund will convert its deposits in foreign currencies, which equal TL 1.6 billion, to Turkish lira,” it added.
The Turkish lira dipped to historic lows against the US dollar in May, following Asian markets’ growing distrust in the lira.
After that, Borsa İstanbul, Turkey’s stock exchange, also announced it would convert all its assets in foreign currency, except short-term necessities, to lira for the same reasons as stated by the TMSF.
On May 26 President Recep Tayyip Erdoğan during a rally called on the public to convert their savings in foreign currencies to the Turkish lira.
“There is a decrease of risk appetite towards emerging markets,” Deputy Prime Minister Mehmet Şimşek tweeted on Friday.
During May $12.3 billion in capital exited emerging markets, the biggest departure since November 2016, according to Şimşek.
“The central bank’s steps and good communication with investors boosted Turkey’s relative performance,” he said.