President Recep Tayyip Erdogan said the government is presenting a new financial alternative for citizens' savings to soothe their worries over exchange rates – which have reached record highs in recent days.

Erdogan said no Turkish citizen will have to move their savings from the Turkish lira to foreign currency
Erdogan said no Turkish citizen will have to move their savings from the Turkish lira to foreign currency (AA Archive)

Turkish President Recep Tayyip Erdogan has announced measures aimed at protecting the country's people from the high cost of living.

No Turkish citizen will have to move their savings from the Turkish lira to foreign currency, declared Erdogan after chairing a Cabinet meeting in the capital Ankara on Monday.

The government is presenting a new financial alternative for citizens' savings to soothe their worries over exchange rates – which have reached record highs in recent days, said Erdogan.

"For exporting companies that find it difficult to present prices due to fluctuations in foreign exchange rates, they will be given a future exchange rate through the Central Bank," he explained.

He also said stoppage (deductions) on companies' dividend payments will also be lowered to 10 percent.

The state subsidy rate on the personal pension system will be raised significantly from 5 percent to 30 percent in order to boost its appeal, he said.

Soaring exchange rates

Erdogan’s announcement comes amid rising prices and soaring exchange rates as the government pursues its “new economic model,” which opposes high interest rates.

Government officials say the exchange rates ignore Turkiye’s strong economic fundamentals and have blamed high prices on hoarders and global factors. 

The benefits of Turkiye’s new approach will become clear in the next three to six months, according to Erdogan.

READ MORE: Turkiye raises national minimum wage by 50% in 2022

Source: AA