President Tayyip Erdogan said on Friday that Turks should keep all of their savings in lira and that recent exchange rate volatility had been largely contained after the lira had fallen sharply in the previous two months.

"I want all my citizens to keep their savings in our own money, to run all their business with our own money, and I recommend this," Erdogan said in an Istanbul speech.

"Let's not forget this: as long as we don't take our own money as a benchmark, we are doomed to sink. The Turkish Lira, our money, that is what we will go forward with Not with this foreign currency, that foreign currency."

Turkish lira collapse: what does it mean for travellers? | The Independent

In a speech to a business group, Erdogan also urged Turks to deposit their gold reserves in banks and reiterated his unconventional view that interest rates were the root cause of inflation.

"For some time, we have been waging the battle of saving the Turkish economy from the cycle of high interest rates and high inflation, and taking it on the path of growth through investment, employment, production, exports, and current account surplus," the president said.

"Interest rates down, interest rates up. Please, my friends, take this out of our books. Interest rates make the rich richer and the poor poorer."

Turkish earnings have been eroded in recent months as a result of the lira's depreciation against the dollar, though it recovered from an all-time low of 18.4 versus the dollar last week following the implementation of a state scheme to protect local deposits from depreciation losses versus hard currencies.

The lira crisis was precipitated by the central bank's aggressive interest rate cuts, totaling 500 basis points since September, carried out under Erdogan's pressure in an effort to boost credit and exports.