Erdogan: Volatility Will Stop Eventually, Asks Turks To Be Patient

Turkish President Recep Erdogan said on Wednesday that volatility in markets will stop eventually.

Erdogan said that the price hikes stemming from rising energy costs would soon stabilize and asked Turks to be patient and trust the government over the new economic model.

The current price hikes in Turkey, he added, are being caused by greed and higher import prices. The lira has not reacted to the latest batch of comments by Turkish President Erdogan, where he reiterated his support for his unorthodox monetary policy where he pressures the CBRT into rate cuts.

The Turkish lira dipped 2% on Wednesday, slipping back towards record lows, as President Tayyip Erdogan renewed his commitment to low interest rates and dismissed European calls to release two prominent prisoners on trial in Turkey.

The lira weakened as far as 13.7350 against the dollar from a close of 13.45 a day earlier. It has lost 46% of its value to the U.S. currency this year, touching an all-time low of 14.0 last week.

The slide has been driven by aggressive monetary easing which economists and opposition politicians say is reckless. Inflation jumped to a three-year high of 21.3% last month.

Despite its depleted reserves, the central bank intervened in markets twice last week over what it called unhealthy prices, keeping the lira below 14 to the dollar.

The central bank has slashed its policy rate by 400 basis points since September, under pressure from Erdogan, and is expected to ease policy again this month.