Turkey’s lira – by far the worst performer in emerging markets in 2021, as well as in the last few years – shed 44% of its value against the dollar over the year and 19% in the last week alone. The lira has logged its worst year since President Tayyip Erdogan came to power nearly two decades ago, despite his appeal on Friday for Turks to trust his unorthodox policies of slashing interest rates in the face of soaring inflation. The lira has whipsawed from 18.4 to 10.25 versus the dollar in the last two weeks, capping its worst year since 2001, when the International Monetary Fund support ended a bad crisis in Turkey.

The currency crisis accelerated in recent months, rattling the $720 billion economy, largely due to Erdogan’s “new economic program” focused on exports and credit despite the lira’s collapse and inflation of more than 21%. The currency crisis, the second since 2018, has badly eroded Turks’ savings and earnings while the record volatility has upended households’ and businesses’ budgets and future plans.

To ease the turmoil, the president unveiled a scheme two weeks ago in which the state protects converted local deposits from losses versus hard currencies, sparking a sharp 50% rally in the lira with support from the central bank.

On Friday, Erdogan – whose opinion poll ratings are sliding ahead of an election in 2023 – called on Turks to keep all their savings in lira and shift gold into banks, saying the market volatility was largely under control. In response, the lira weakened to as far as 13.63 before recovering to end the day flat at 13.1875.