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Turks Cling to Dollars in Red Flag for Erdogan Plan to Save Lira

  • Foreign-currency deposits rose to another record in December
  • Increase comes despite measures aimed at curbing FX demand
Recep Tayyip Erdogan
Recep Tayyip ErdoganPhotographer: Alessia Pierdomenico/Bloomberg

Turkish investors are still clinging to foreign currencies, undermining President Recep Tayyip Erdogan’s plan to support the lira without raising interest rates. 

Companies boosted their foreign-currency holdings by around $1.6 billion in the seven days through Dec. 24, taking advantage of a rally that saw the lira almost double in value that week. While households trimmed their positions by just over $100 million, it hardly put a dent in total foreign-currency deposits, which rose to a record $239 billion, according to the latest central bank data.