A law approved by Turkey's Parliament on Thursday offers a corporate income tax exemption on gains on deposits of funds converted to Turkish lira from foreign currency, in a new step to support the country's currency.

According to the law, interest and profits earned on the converted lira accounts with at least three months’ maturity will be exempt from the tax if they are converted by the fourth-quarter tax return submission date, which is Feb. 17.

On Jan. 11, Turkey’s Official Gazette announced that Ankara had included corporate foreign currency and gold deposit accounts converted to lira in the scheme that protects local currency savings against foreign exchange rate volatility.

The initiative, announced by President Recep Tayyip Erdoğan in December, compensates depositors for any loss in the value of the lira incurred during the duration of the deposit.

Deposits under the scheme have so far reached TL 163 billion ($12.1 billion), Erdoğan said on Wednesday.

The scheme was unveiled after the lira fell to a record low of 18.4 to the dollar, before rebounding sharply to just over 10 and then settling at current levels just under 14 to the United States currency.

The volatility came after the Central Bank of the Republic of Turkey (CBRT) slashed its benchmark interest rate by 500 basis points to 14% from 19% since September.

It halted the easing cycle and held its policy rate steady on Thursday.

The lira has steadied this month. It was 0.8% weaker at 13.43 against the dollar on Friday.

Also under the legislation, inflation accounting will be postponed until Dec. 31, 2023, even if all necessary conditions are met for inflation accounting in the 2021, 2022 fiscal periods and the 2023 quarterly periods.