In an attempt to assure holders of lira deposits that there’s no reason for them to switch to foreign currencies, Turkey’s Treasury and Finance Minister Nureddin Nebati has said that Turks can “rest easy” because the lira is at its “lowest level” and “can’t decline further,” the state-run Anadolu news agency reported on Monday.
Nebati was speaking at an event hosted on Monday by the Anatolian Publishers Association (AYD) in Şanlıurfa about a government-backed scheme that protects lira deposits against depreciation.
The scheme, which was unveiled by President Recep Tayyip Erdoğan in December, stipulates that the country’s treasury will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed bank interest rates.
The instrument aims to attract people who hold deposits in foreign currencies to switch to the lira, thereby helping the Turkish currency curb losses, and applies for individuals holding lira deposit accounts with maturities between three and 12 months.
Saying the measure will have been in effect for three months on March 23 and that Erdoğan had the authority to extend it for another year at the end of its first year, Nebati added: “We’ll see [on March 23] if people will [take their money out of the scheme]. There’s no reason for an investor to do that. … Because the Turkish lira is at its lowest level, it can’t decline any further, and citizens can rest easy.”
The minister also argued that confidence in the Turkish lira had increased despite the Ukraine-Russia war, expressing his belief that foreign investors are choosing to invest in Turkey and will continue to do so.
Nebati also drew criticism and ridicule on social media for using the Islamic-nationalist rhetoric when talking about annual inflation, which in February reached 54.4 percent, a two-decade high, according to official figures.
“Good things will always come to this country. Don’t worry about it. Don’t feel sad. We all have an ideal. Our flag won’t touch the ground and the adhan [call to prayer] won’t be silenced,” the minister said.
The minister’s remarks on the flag and the call to prayer, which are frequently used by members of the ruling Justice and Development Party (AKP) in times of crisis, led many to believe that his replacement was imminent, local media reports said.
“The situation is much worse than we thought, since the adhan and the flag remarks came before the end of his sixth month on the job. This tactic is obsolete. Mr. Nureddin Nebati, you should find new things to say,” main opposition Republican People’s Party (CHP) Deputy Chairman Veli Ağbaba tweeted on Monday.
Nebati daha 6 ayı dolmadan ezan, bayrak edebiyatı başladığına göre durum sandığımızdan çok daha kötü..
Bu taktik eskidi Sn @NureddinNebati, yeni söylemler bulun artık.. https://t.co/CXg5GpiyQx
— Veli Ağbaba (@veliagbaba) March 21, 2022
Nebati was appointed as minister of treasury and finance by Erdoğan in December, replacing Lütfi Elvan, who held the post for just over a year after having replaced Berat Albayrak, Erdoğan’s son-in-law.
The Turkish lira is down 11 percent against the dollar this year, mainly due to the economic fallout from Russia’s invasion of Ukraine.
The currency had declined 44 percent last year, mostly after a series of rate cuts, long sought by Erdoğan, which sparked a currency crisis and sent inflation to a 20-year high.
The lira protection scheme as well as costly forex market interventions by the central bank helped stem the currency crisis in December.
However, Russia’s invasion of Ukraine risks widening Turkey’s current account deficit due to rises in commodity prices and a potential decline in tourism revenue.