SAWT BEIRUT INTERNATIONAL

| 24 October 2021, Sunday |

Turkey’s Erdogan overhauls monetary policy committee, lira hits record low

Turkey’s Official Gazette said that President Tayyip Erdogan dismissed three central bank monetary policy committee (MPC) members on Thursday, appointing two new members in their place, sending the lira to record lows.

It said those dismissed were deputy governors Semih Tumen and Ugur Namik Kucuk, along with another MPC member, Abdullah Yavas.

Erdogan assigned Taha Cakmak as a deputy central bank governor and Yusuf Tuna as an MPC member, it said.

Analysts observed the move as fresh evidence of political intervention by Erdogan, a self-described enemy of interest rates who frequently calls for rate cuts.

The lira weakened to a record low of 9.1900 against the dollar after the announcement, a loss of one percent on the day. It has weakened about 19 percent so far this year, driven by concerns about monetary policy.

It later pared some of the day’s losses, to stand at 9.1325 at 0533 GMT.

Last month, the central bank unpredictably cut its key rate to 18 percent from 19 percent despite annual inflation of nearly 20 percent, sparking a new selloff in the lira, which was also hit by the dollar strengthening against other currencies.

The MPC overhaul came after the presidency said on Wednesday evening that Erdogan had met Central Bank Governor Sahap Kavcioglu, publishing a photo of Erdogan standing next to him.