Comeback for Turkish Lira

GETTY IMAGES,President Tayyip Erdogan built his reputation on strengthening Turkey's economy


The Turkish lira has seen a second day of dramatic gains after President Recep Tayyip Erdogan unveiled a new plan aimed at strengthening the currency.


In Tuesday trading, it rose as much as 15%, after soaring 25% on Monday.


The gains came after Mr Erdogan pledged to compensate savers for currency moves that have eroded the value of bank deposits held in lira.


The currency had fallen to record lows as the rise in the country's cost of living hit 21.7%.


But at one point on Tuesday, it firmed to just over 11 to the dollar before falling back slightly.

Why currency crash does not worry Turkey's Erdogan


Despite the price rises, Mr Erdogan has pushed the central bank to keep cutting interest rates.



Last week, it reduced borrowing costs to from 15% to 14% on Thursday. It was the fourth cut in as many months.


Normally, central banks raise rates to combat rising prices, but Mr Erdogan has called such tools "the mother and father of all evil".


The president and his allies argue that lower interest rates give a boost to Turkish exports, investment and jobs. But many economists say the rate cuts are reckless.  READ MORE...