The Turkish lira’s exchange rate fell 14 percent after President Recep Tayyip Erdogan ousted the central bank governor late last week.
According to Euronews. Naci Agbal, the former head of the Turkish Central Bank, managed to raise the value of the Turkish lira, which was at its lowest level ever, during the four months he spent in office.
-Advertisement-
In a surprise move on Saturday, March 20, Erdogan ousted Turkey’s third central bank governor in two years.
During his short tenure, Naci Agbal sought to combat inflation by raising interest rates by as much as 19%.
The toppling shocked the turnout of local and foreign investors, who praised the recent monetary policy of the Turkish Central Bank.
The value of the US dollar was about 8.4 pounds at the beginning of the week in East Asian markets. While the Turkish lira exchange rate against the dollar on Friday was 7.22 lira, which indicates a significant decline, reaching more than 14%.
But the value of the lira against the dollar amounted to 7.8 hours after the market opened.
Last Thursday, Naci Agbal raised the value of the lira to higher levels by raising interest rates by 2%.
-Advertisement-
For a long time, investors have been calling for strict fiscal policies in Turkey to limit inflation above 15% and prevent foreign investors from leaving.
Analysts and investors are concerned that Erdogan’s decision to appoint Şahab Kavcioglu as the new head of Turkey’s central bank could destroy short-term Agbal gains.
Kavcioglu wrote, in a note in a Turkish newspaper last month:
“Raising interest rates will indirectly boost inflation.”
The interest rate in Turkey is now 19 percent, which has attracted foreign investors.
