Defying Erdogan’s calls, Turks rush for dollars
A significant amount of loan money, released as incentives for the Turkish business community, appears to have ended up in high-yield bank deposits and foreign currency, reflecting widespread mistrust in the future of the Turkish economy.
On July 15, 2016, the day of the botched coup attempt in Turkey, the foreign-exchange bank deposits of Turkish citizens and companies totaled $191 billion. The putsch worsened the country’s already troubled economic outlook, stoking concerns of political and economic instability. In the ensuing months, international credit rating agencies cut Turkey to non-investment grade, while global factors contributed to a drastic slump in the Turkish lira, which further compounded the problems. President Recep Tayyip Erdogan described the downturn as an economic coup that sought “to bring Turkey to its knees.” He urged citizens and institutions to convert their foreign exchange savings to Turkish liras.
As of Dec. 30, 2016, Turkey's foreign exchange deposits had declined by about $17 billion to $174 billion. In fact, the dollar and the euro had appreciated so much against the Turkish lira that exchanging them at those rates was quite profitable.
