by Zeynep Cermen
ISTANBUL, Dec. 23 (Xinhua) -- An atmosphere of cautious optimism was in the air on Thursday in Istanbul's Grand Bazaar, the financial heart of the city filled with foreign exchange offices, after the Turkish lira rebounded from a record low.
The lira-dollar exchange rate dropped to 11.20 at 3:30 p.m. local time (1230 GMT), after the currency plunged a record low of 18.30 against the greenback on Monday, losing nearly 60 percent of its value since the start of the year.
Resat Yilmaz, who has been in the gold and foreign exchange business in the Grand Bazaar for about 40 years, expressed his optimism in front of his tiny gold store with reservations.
"Dark clouds were circulating in our country, but the latest statement of the president lowered the tension," Yilmaz said.
On Monday evening, Turkey's President Recep Tayyip Erdogan revealed new measures to protect savings from the fluctuations of the national currency.
He said the government would compensate the depositor if the yield remains below the exchange rate difference between the account opening and its maturity dates despite the earned interest.
"Now, all eyes are on inflation (which is currently above 21 percent)," Yilmaz continued. "If the decline in the dollar would be reflected in food prices, this would be very positive."
In his view, currently, there is no demand for foreign currency in the markets as the expectation that the lira would achieve more gains.
"Now, people have been increasingly buying gold," he said, noting that one gram of gold was traded at around 650 liras at 3:45 p.m. local time on Thursday, after testing over 1,000 liras on Monday.
"This is a very positive development for the wedding market, because not everyone can afford weddings at a time of high gold prices," he stressed.
According to Yilmaz, the most important thing from now on will be whether this positive picture will be permanent.
He also noted that Turkey has entered into an election period, though the election date is not clear yet. "This would put an extra burden on the currency. We can expect more drastic fluctuations ahead, and this spring weather could be temporary."
Erdogan earlier reiterated that the government would not call for an early election, and the elections will be held in 2023.
A stockbroker who declined to give his name said everything came back to normal at the Grand Bazaar after the digital boards of foreign exchange offices were temporarily darkened with all the transactions halted on Monday.
He said that drastic fluctuations did not benefit anyone and the important thing for the markets is stability.
The losses of the lira expanded during the last couple of months with the central bank's consecutive interest rate cuts. The bank has lowered its benchmark policy rate by 500 basis points since September, despite soaring inflation, pushing the lira to all-time lows.
Erdogan argues that keeping rates low would support growth, exports, and employment. Enditem
http://www.xinhuanet.com/english/20211224/183e8cfc2c0b4294a67a4fc8ed79e835/c.html
2021-12-23 16:17:00Z
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