Having crashed unrelentingly to record lows in the last few weeks, the world's most volatile currency is surging higher this morning after President Tayyip Erdogan said on Thursday the Turkish central bank and other banks must thwart games played with the foreign exchange rate, which is being used against the country like a weapon.
Cited by Reuters, the Turkish president said "It's clear that the speculation on the forex rate has no depth.... Our central bank and other banks must thwart these games."
Erdogan also added that "The central bank has the necessary tools and ability to take measures on this. I am also calling on the business world, it is time to invest and create jobs," he said
Finally, he also compared FX traders to terrorists, when quoted by Bloomberg he said, "terrorists with dollars and with weapons have no difference."
Earlier in the week the central bank made a futile attempt to stop the rot by adjusting its bank reserve ratio by 50bps lower, and said it stood ready to do more if the rout worsened. In December, he helped spur a brief rally in the lira by urging citizens to repatriate their dollar holdings into the local currency. That, too, did not help.
For now, his jawboning has prevented the daily plunge in the Turkish currency.