The Turkish currency remains lower. Now President Erdogan is removing the head of the central bank, whom he appointed last July.
Istanbul (AP) – Amid the accelerating decline of the Turkish lira, President Recep Tayyip Erdogan fired central bank chief Murat Uysal. This stems from a decree published on Saturday night.
Uysal must now vacate the position of Naci Agbal, who was finance minister from 2015 to 2018. No reason was given.
For around ten weeks, the Turkish currency has seen an accelerated decline against other major currencies.
On Friday, the lira hit a record low in trading with the US dollar. For a dollar, sometimes you had to pay 8,576 lire; that’s about 49 percent more than a year earlier. Recently, a euro costs almost 10.18 lire sometimes; this even corresponds to an increase of around 60 percent in one year. The Turkish currency has also depreciated significantly against other major currencies such as the Swiss franc, the British pound or the Japanese yen. This means that imported goods are vastly more expensive for the Turks.
Erdogan had only appointed Uysal as head of the central bank in July 2019. His predecessor Murat Cetinkaya had not followed instructions on the key interest rate, it was said at the time to justify it. The conservative president, who advocates unorthodox monetary policy, often describes the key interest rate as the “mother of all evils” and urges it to be lowered. Turkey is waging an economic war against a “devil’s triangle” consisting of interest rates, exchange rates and inflation, Erdogan said last weekend.
The Turkish currency suffered the most recent major setback in October when the country’s central bank failed to raise the key interest rate as expected. Despite a high inflation rate of almost twelve percent, the central bank had left the key interest rate unchanged at 10.25 percent, thus losing hope of an interest rate hike cycle in the fight against inflation.