US dollar drops below 3.50 Turkish liras

The U.S. dollar fell below the 3.50 threshold against the Turkish lira for the first time since Dec. 1 on Tuesday.

The dollar went down to 3.4919 by 3.10 p.m. local time (1210 GMT).

The drop came after the Turkish Central Bank issued a statement earlier stating that the inflation rate forecast would be held at 7.5 percent.

Speaking at a press conference on the bank's 2017 monetary and exchange-rate policy, Central Bank Governor Murat Cetinkaya said Turkey's economic activity has been recovering in the last quarter of 2016, while fluctuations in the Turkish lira will not make a "durable" impact on the economy.

Cetinkaya announced that Turkey's Central Bank would hold its year-end inflation forecast at 7.5 percent, citing a favorable outlook for food prices and a moderate domestic demand despite foreign exchange volatility as reasons.

"The bank will continue to support financial stability while aiming to keep inflation close to the target," he added.

About support for the Turkish lira, Cetinkaya said: "We will continue to support the local currency as the medium of exchange in economic activities."

On Sunday, President Recep Tayyip Erdoğan said Turkey had taken steps to carry out its foreign trade in its national currency.

"If we buy something from them [foreign countries], we will do that in their currency; if they buy something from us, they will do it in our currency," Erdoğan had said, adding Turkey will "play its own game" in the economic arena against "all games" played against it.

On Friday, the president called on Turkish citizens to convert their foreign exchange savings into Turkish lira and gold to help boost the value of the local currency.