The Turkish lira hit a new record low on Thursday against the US dollar, the euro and the UK pound despite interventions by state banks and Turkey’s Central Bank (CBRT) to support the currency and keep it stable.
On Thursday the UK dollar shot up to 7.31 TL, the euro rose to 8.65 TL and the UK pound to 9.62 TL, reaching their highest prices of all time.
In order to ease the economic situation, Deputy Prime Minister and Minister of Foreign Affairs Kudret Özersay said that the government has started work to prevent the damage caused by the excessive increase in foreign exchange and will make some decisions at the beginning of the week.
Özersay said yesterday:
“Today, after the Council of Ministers meeting, we continued our meeting with finance and economy officials and evaluated what measures can be taken to prevent the negative effects caused by the excessive increase in foreign exchange.”
“It is possible to take very effective measures against the foreign exchange increase/depreciation of the Turkish Lira, with what tools we have at our disposal. In 2018, we faced a similar currency crisis during the time of the previous government, this is the second. Rightly, everyone is worried, especially our citizens, who pay for services in foreign currency – rent, school fees and have many other obligations dependent on foreign currency”.
It has been suggest that:
1) If both residential and commercial buildings are rented in Turkish Lira instead of foreign currency, a more advantageous tax / withholding application is introduced (encouragement of leasing in TL) and additional withholding advantage is created in the event that lease contracts in foreign currency are converted into TL contracts.
2) Receiving the leases in foreign currency fixed at a foreign exchange rate to be determined for leases made from the state;
3) in private educational institutions (including universities) the Republic of Turkey and TRNC citizens can avoid problems by fixing the exchange rate for students’ school fees and make similar arrangements.
“At the beginning of the week, we will concretise these issues numerically and try to make decisions, and share them with the public.“, Özersay concluded.