The Istanbul Stock Exchange on December 22 once again suspended operation due to a sharp drop in the main stock index amid the volatility of the Turkish Lira exchange rate, Report informs referring to Prime agency.
The stock exchange announced the activation of the system of automatic suspension of trading after the fall of the main stock index by more than 5%. In the previous three days, the exchange suspended operations for the same reason for a period of 30 to 60 minutes.
Last week, the Central Bank of Turkey again decided to reduce the discount rate to 14% from 15%, which caused another sharp drop in the Turkish currency to a record 18.4 lira per dollar. However, on December 20 evening, its fall was replaced by a significant increase. As a result, the lira compensated for the losses of the last days. On December 22, the Turkish currency rate stabilized at 12.4-12.5 lira per dollar.
The sharp rise in the lira began on December 20 after Turkish President Recep Tayyip Erdogan announced new measures to counter exchange rate volatility. In particular, he said that the government will encourage deposits in lira, compensating citizens for losses due to exchange rate fluctuations.
The Turkish currency in January this year traded at the rate of 7.4 lira per dollar and at the time of reaching a historical minimum fell by 60%, and lost more than 40% of the value over the past month.
Erdogan is in favor of cutting the discount rate, arguing that it will lead to lower inflation. He has appointed new heads to the central bank three times since July 2019 and the minister of finance twice since November 2021. Earlier, the leaders of Turkey's main opposition parties accused Erdogan of economic incompetence and called for early elections. The Turkish leader rejected the call, saying that the presidential and parliamentary elections in Turkey will take place as planned in June 2023.