The Turkish lira soared, rebounding from a record low reached earlier, after Turkish President Recep Tayyip Erdogan’s government announced extraordinary measures to bolster the currency.
The dollar-lira currency pair plunged as much as 13% to 14.27 per dollar after spiking to 18.36 -- a record low -- earlier in the session. The lira became the biggest gainer on Monday among 31 major currencies tracked by Bloomberg.
Erdogan’s government announced measures including the introduction of a new program that will protect savings from fluctuations in the local currency. The government will make up for losses incurred by holders of lira deposits should the lira’s declines against hard currencies exceed interest rates promised by banks, Erdogan said after chairing a cabinet meeting in Ankara.
The measures are intended to mitigate retail investors’ demand for dollars and bring to an end three months of turmoil for the nation’s currency.
The lira has lost about half of its value against the U.S. dollar since September, with declines gaining pace after Erdogan last month unveiled an economic model that relies on lower borrowing costs and a cheaper currency.
