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Reuters
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The Turkish lira declined today, Tuesday, to remain under pressure, as the market is studying the effects of Turkish President Recep Tayyip Erdogan’s replacement of the central bank governor with another critic of tightening monetary policy.
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The Turkish currency recorded 7.85 lira against the dollar, by 05:00 GMT, to fall from a close of 7.8050 lira on Monday, when it plunged by up to 15 percent, approaching record low levels.
The new governor of the Turkish Central Bank, Shehab Koçioglu, a former lawmaker in the ruling party, shares with Erdogan the unorthodox view that high interest rates cause inflation, and he is the third central bank governor appointed by the president since mid-2019.
The shocking dismissal of his predecessor, Naji Iqbal, two days after he raised interest rates to curb inflation, strengthens the view of investors, which has been chasing the emerging market economy for years, that politics cast a shadow over the independence of the Central Bank.
A source told “Reuters” that Gojioglu sought to ease investor concerns about a sharp shift from tightening to expansionary monetary policy by informing the chief executives of banks on Sunday that he is not planning an imminent policy adjustment.
Source: Reuters
