Turkey’s Treasury said on Friday the fight against inflation remained the top priority in its macroeconomic policy after it and other state institutions announced measures to support an economy beleaguered by surging prices and a sliding lira.

The Treasury said it would issue domestic bonds indexed to the income of state enterprises to encourage lira asset savings, the central bank raised the required reserves ratio for lira commercial cash loans to 20 per cent from 10 per cent, and the banking watchdog tweaked a maturity limit for consumer loans.

“The fight against inflation remains top priority. In this struggle the importance of coordination between institutions in clear and all our institutions are acting with the understanding of joint struggle,” a Treasury statement said.

The steps prompted volatile trade in the lira. It firmed as far as 16.8 to the US dollar ahead of the announcements before sliding back to 17.3 after they were unveiled. It traded at 17.125 at 0714 GMT after the Treasury’s latest statement.

The lira has slid 23 per cent this year in addition to last year’s 44 per cent tumble in value, which was precipitated by a series of unorthodox central bank rate cuts, carried out under pressure from President Tayyip Erdogan despite surging inflation.

The latest announcements also triggered a slide in bond yields, with the yield on the 10-year benchmark bond slipping below 23 per cent from a last trade of 25.72 per cent on Thursday.

The Treasury said the use of the lira and practices to increase its appeal will continue without compromising free market rules.

Separately, the central bank said banks will maintain additional lira long-term fixed-rate securities for foreign currency deposits/participation funds as a complementary step to increasing the weight of lira fixed-rate securities in the collateral pool that takes effect on June 24.

“The aim of this regulation is to increase the effectiveness of the monetary policy within the scope of the liraization strategy,” its statement said.