(Bloomberg) -- Sadik Cesur believes that a haircut could save the Turkish lira.
He's not addressing bondholders, and casts no aspersions on the country's ability to repay its debts. Cesur is a hairdresser, who's posted a sign in his window offering a free trim to anyone who comes to his shop with a receipt proving they've switched $300 dollars into local currency.
"This is what we came up with: as a small business, we've set it at $300," he said in an interview with Turkey's 24 TV. "We're doing what's within our means, and hopefully big businessmen will join us in offering a car to anyone who can prove they've changed $3 million," he said, urging others to rally to stem the currency's declines.
In doing so the barber — whose name transliterates as "Loyal Brave" — is joining a small army of householders and businesses who say they're heeding their president's calls to support the currency. Unfortunately for them it might not be enough, as the lira continued to break fresh record lows even after Recep Tayyip Erdogan urged Turks, in a televised speech, to reach under the mattress for cash they might have stashed away.
Anyone who converted out of foreign-currency a week ago will have already lost more than 2 percent of the value of those savings, as the lira weakened faster than any of its peers over the period. It was trading 1.34 percent lower by 4:09 p.m. in Istanbul, after hitting a new all-time low of 3.5935 against the dollar earlier in the day.
Amid the selloff, newspapers have reported patriotic queues at bureaux de change, with citizens encouraged by ministers, national newspapers and today their president. "Those with currency under the bed should come and turn their money to gold; they should come and turn their money into lira," Erdogan said today, warning Turkey "will soon foil this plot."
While he didn't specify what he meant, Cemil Ertem, a senior economic aide, expanded on the theme: the dollar is "a virus that spreads the U.S.'s crises around the whole world," he said in a column today, saying a shift to a gold-based monetary system would ultimately free Turkey from the "global trap."
The lira has weakened faster than that of any fellow emerging market's this year except Argentina, as a failed coup — and the crackdown that's followed — spooked foreign investors, exacerbating the effects of the stronger dollar that's greeted the election of Donald Trump.
After a 25 basis point rate hike to the central bank's overnight lending rate last month failed to prevent the rout, clamors for householders to risk their savings have grown. The odds are stacked against them. Turkish central bank data show that banks worldwide trade $17 billion liras every day; a volume which every adult in Turkey would have to change more than a daily $300 dollars to overpower.
Still, the efforts of those fighting the fallout have taken varied forms. While some businesses are rewarding those dumping dollars, farmers in the central Anatolian province of Aksaray staged a symbolic protest at one of the country's largest livestock markets on Wednesday, burning bills "in retaliation at the U.S. and Europe," according to Ihlas news agency.
“Europe and America now want to realize economically the coup that they failed to carry out with tanks, rifles and F-16s on July 15,” Ihlas cited Hamit Ozkok, chairman of Aksaray Commerce Exchange, as saying. He was referring to the date of the failed putsch earlier this summer, in which hundreds lost their lives. While Erdogan blames a former political ally, Fethullah Gulen, for instigating the coup, the cleric resides in Pennsylvania, and Turkey has sparred with the U.S. about his extradition. Gulen has denied the allegations.
"I think there's a failure to appreciate that some of the rhetoric smacks of desperation," said Paul McNamara, a fund manager at GAM Ltd in London who oversees around $5 billion in assets. He said only a strong increase to central bank borrowing costs can halt the currency's declines.
For now, it's people like Cesur who are leading the fightback. He thanked those who'd already taken advantage of his campaign, saying he can cope with doing three out of 10 shaves for free. "We're like this, we Turks," he told the television audience. "We're considerate, we love our country. We don't have any other place to go."