Turkey's lira fell as much as 6% on Thursday, extending a four-day slide and eating into last week's big gains, as the government urged savers and investors to ignore the volatility and worries over surging inflation and unorthodox rate cuts.
The currency has shed as much as 20% in four trading sessions, reversing a more than 50% rally over the previous five days which was triggered by a new state scheme to protect lira deposits from losses due to depreciation.
The lira weakened as far as 13.4 to the dollar before recovering to 13.05 by 0909 GMT, still down 3% on the day. It has swung from 18.4 to 10.25 in the last two weeks, a dizzying ride for Turks who have seen their savings depleted and household budgets upended.
The fast-moving currency crisis was set off by a series of aggressive interest rate cuts beginning in September that were sought by President Recep Tayyip Erdogan under his "new economic program" focused on exports and credit.
Economists and opposition lawmakers called the policy easing reckless given inflation had climbed above 21%, and is expected to soar beyond 30% this month and in the months ahead, due primarily to the sharp lira depreciation, Reuters reported.
Finance Minister Nureddin Nebati - whom Erdogan appointed earlier this month - has given a series of televised interviews and said late on Wednesday the volatility was not worrying.
He predicted single-digit inflation by 2023, which is more optimistic than analysts' views.
Nebati also said there were no state interventions to sell dollars and boost the lira last week - despite data showing that the central bank's foreign reserves tumbled in what bankers said reflected state-backed market support.
