Currency crisis in Turkey: Erdogan fires central bank chief

Central bank chief Murat Uysal has to vacate his post.
Image: Reuters

Turkey is in the middle of a currency crisis, and the Turkish lira recently fell to a record low again. Now President Erdogan has surprisingly dismissed the head of the central bank. The successor has already been determined.

D.he Turkish President Recep Tayyip Erdogan surprisingly dismissed central bank boss Murat Uysal in view of the ongoing currency crisis. As his successor, he appointed ex-Finance Minister Naci Agbal by decree, as announced in the official gazette on Saturday. The Turkish lira fell again to a record low against the dollar on Friday. It has fallen by 30 percent against the American currency this year. Erdogan had only promoted Uysal from vice-chief to the top of the central bank in July 2019 after he fired his predecessor Murat Cetinkaya in a dispute over what he saw as too high interest rates. Uysal then started to cut interest rates. In September, however, the central bank surprisingly tightened the interest rate rein in the fight against the weakness of the Lira.

The driver of the free fall of the lira is high inflation. The country’s badly melted currency reserves have also accelerated the decline. In addition, tensions in the relationship with the EU and America as well as concerns about possible sanctions weigh on the currency of the emerging market. Erdogan is an avowed opponent of interest rates and had hoped that the reductions he initiated, which he had largely initiated, would give the economy a boost.

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