Ankara/Turkey, Oct. 14/BNA/The Turkish lira hit new records against the dollar on Thursday after President Recep Tayyip Erdogan sacked senior central bank officials, raising concerns about the Turkish leader’s interference in the bank’s activities.
Erdogan has dismissed central bank deputy governors Semih Tumen and Ugur Namik Kucuk as well as Abdullah Yavas, a member of the bank’s monetary policy committee, according to the Official Gazette. Taha Jakmak was appointed as deputy governor, and Youssef Touna was appointed as a member of the Monetary Policy Committee.
Turkish media reports said Kucuk opposed the bank’s decision last month to cut its key interest rate by one percentage point, bowing to Erdogan’s demand to cut borrowing rates to boost growth, the Associated Press reported.
Economists generally view higher interest rates as a limit to inflation, but the Turkish president has repeatedly said the opposite – that higher interest rates lead to higher prices.
The lira fell 1% overnight to 9.19 against the dollar. It was trading at 9.14 per dollar early Thursday. The lira has lost about 19% of its value since the beginning of the year.
The change in bank officials came hours after Erdogan met with the bank’s governor, Sahab Kavcioglu.
Kavcioglu is the fourth appointed to the position since 2019 amid concerns about the independence of the bank. He had kept the interest rate at 19% since taking office in March. Erdogan called for a rate cut in August.
The Turkish economy did not fully recover from the currency crisis of 2018 when the coronavirus pandemic hit it, causing soaring inflation and unemployment.
RAE