ISTANBUL (Dispatches) – President Tayyip Erdogan told Turks to exchange gold and hard currency into lira on Friday, framing Turkey’s currency crisis as a "national battle” against economic enemies.
The lira, which has lost a third of its value this year, fell on his comments and was trading at around 6.05 to the dollar after he spoke, nearly 9 percent weaker on the day.
"The dollar cannot block our path. Don’t worry,” Erdogan told a crowd in the northeastern city of Bayburt.
"However, I say it once again from here. If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks. This is a national, domestic battle,” he said.
"This will be my people’s response to those who have waged an economic war against us.”
Earlier on Friday the lira plunged as much as 14 percent on as worries about Erdogan’s influence over monetary policy and worsening U.S. relations snowballed into a market panic that also hit shares of European banks.
Meanwhile, Erdogan told supporters in the Black Sea province of Rize late on Thursday that there were "various campaigns being carried out" against the country.
"Don't heed them. Don't forget, if they have their dollars, we have our people, our God. We are working hard. Look at what we were 16 years ago and look at us now," he said.
Relations between the two NATO allies have taken a turn for the worse amid dispute over the detention in Turkey of U.S. evangelical pastor Andrew Brunson on terrorism charges.
U.S. President Donald Trump wrote on Twitter late last month that his country "will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson.”
Erdogan responded by announcing to freeze the assets in Turkey of U.S. ministers of "justice and interior," in tit-for-tat response to U.S. sanctions.
Ankara and Washington also disagree over their military interventions in the Syria war, Turkey's plan to buy missile systems from Russia and the U.S. conviction of a Turkish state bank executive on sanctions-busting charges in January.
The standoff has triggered a selloff in the lira amid investor concerns about the direction of the country. Erdogan called on citizens last week to convert their hard currency and gold into lira in order to prop up the plunging currency with a "domestic and national stance."