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Turkish President Recep Tayyip Erdogan’s emergency plan to prop up the battered Turkish lira and stop creeping dollarization has reversed the currency’s free fall for now, but the package of new measures offers no remedy to the loss of purchasing power plaguing Turkey’s wage-earners — from unskilled workers to white-collar professionals — amid soaring inflation.
The new plan, announced Dec. 20 shortly after the lira sank to an all-time low, aims to encourage retail lira deposits by offering a state guarantee to pay the differential should the lira’s decline against hard currencies exceed banks’ interest rates.
