Turkey has said it will take the necessary measures to douse the economic impact of the conflict between Russia and Ukraine and called on households to maintain confidence in the national currency.
The call came amid high volatility in financial markets after Russia launched an all-out invasion of Ukraine by land, air and sea on Thursday, the biggest attack by one state against another in Europe since World War II.
The Treasury and Finance Ministry urged citizens to avoid risky positions in the financial markets and continue to trust the Turkish lira.
The developments regarding Russia’s military intervention in Ukraine and its possible economic and financial impacts are being monitored, it said in a written statement on Thursday.
The Turkish lira fell on Friday morning after recovering from a slide of as much as 5% a day earlier, when investors sought safe havens amid the conflict.
The lira weakened 0.6% to 14.07 against the dollar by 7:47 a.m. GMT. On Thursday, it slid as far as 14.62, its weakest level since a slide in late December, before staging a recovery and ending 1% weaker.
Istanbul’s main BIST 100 stock index, which dropped 8.2% on Thursday, was 1% higher on Friday.
Until Thursday’s slide, the lira had stabilized over the past two months, supported by a scheme that protects lira deposits against depreciation.
President Recep Tayyip Erdoğan has forged good ties with both Russia and Ukraine, leaving Ankara in a difficult position as the conflict deepens.
He has said Turkey backs Ukraine’s territorial integrity and is “sincerely saddened” by Russia’s invasion.
Economists have said Turkey may see a drop in tourism and export income this year from Russia and Ukraine, two countries that account for a significant portion of its visitors.
“All necessary measures will be taken decisively in this process as it has been up to now,” the ministry said.
With its solid foundations, the Turkish economy has overcome many internal and external shocks in the past period, the statement said.
“We have further strengthened our country’s resilience against difficulties,” the ministry said, citing the steps that the government has taken as part of the new economic policy that aims for low interest rates to boost credit, exports and investments.
In the last two months, it added, important policies have been implemented to strengthen the lira and they have been successful in this regard.
“In this context, it is considered important in every respect that our citizens continue to trust the Turkish lira and Turkish lira-denominated assets.”
