Is there a correlation between criticism of France and seeing its currency tumble? Turkish President Recep Tayyip Erdogan sees the damage caused by this improbable correlation, which has been added, moreover, to inflation of 12%.
The massive withdrawals of foreign investors from the Turkish lira took it to its lowest point. Fearing a hackneyed plot from abroad and reinforced by an imaginary fifth column, the Turkish president on Saturday sacked central bank governor Murat Uysal, a technocrat who refuses to follow the presidential directive to lower interest rates.
The decision was announced by decree published in the Official Journal. Murat Uysal is replaced by former Minister of Finance Naci Agbal, known to be loyal among the faithful.
This dismissal of the central bank governor is the fourth in five years and should fuel long-standing criticism of the interference of political power in the management of the country’s monetary policy.
The Turkish lira closed at 8.5445 to the dollar on Friday after hitting a record low of 8.58. It has plunged 30% since the start of the year, 10% in the past two weeks.
Recep Tayyip Erdogan continues to call for lower interest rates. Last weekend, he noted that Turkey was waging an economic war against those who try to lock him “in the diabolical triangle of interest rates, rates of change and inflation.”