{"id":56312,"date":"2021-03-21T23:16:24","date_gmt":"2021-03-22T06:16:24","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=56312"},"modified":"2021-03-30T23:40:41","modified_gmt":"2021-03-31T06:40:41","slug":"erdogan-slams-turkish-lira-with-surprise-change-at-central-bank","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2021\/03\/21\/erdogan-slams-turkish-lira-with-surprise-change-at-central-bank\/","title":{"rendered":"Erdogan Slams the Turkish Lira With Surprise Change at the Central Bank"},"content":{"rendered":"\n

Financial markets hate surprises. Turkey’s President Tayyip Erdogan slammed currency markets to start the week. Two Days after the Central Bank of the Republic of Turkey (CBRT) hiked interest rates again (this time from 17 to 19%<\/a>), Erdogan replaced the governor. The sacking occurred on Saturday<\/a>, but the market clearly needed a lot more time to absorb the shock of the news. The Turkish lira (USD\/TRY) immediately weakened after the open of trading. Just three months ago, the lira’s fever looked like it finally broke<\/a>.<\/p>\n\n\n\n

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The Turkish lira<\/a> (USD\/TRY) weakened significantly after news of a switch at the governor’s seat in the CBRT. At the time of writing, the gain in USD\/TRY faded from over 13% to 8%.<\/em><\/strong><\/figcaption><\/figure><\/div>\n\n\n\n

The CBRT’s site does not yet include news about the new governor. Instead, the site includes a terse, bolierplate statement<\/a> from the new governor, \u015eahap Kavc\u0131o\u011flu, about monetary policy:<\/p>\n\n\n\n

“Under the duties and powers laid down by law, the Central Bank of the Republic of Turkey will continue to use the monetary policy tools effectively in line with its main objective of achieving a permanent fall in inflation.<\/p>

The decline in inflation will foster macroeconomic stability through the fall in country risk premiums and a permanent improvement in financing costs, and will contribute to the development of conditions essential for sustainable growth that will enhance investment, production, exports and employment.<\/p>

Accordingly, Monetary Policy Committee Meetings will be held as previously scheduled and announced to the public. In line with the transparency and predictability principles in policies, communication channels will be used effectively to address all the stakeholders.”<\/p><\/blockquote>\n\n\n\n

Kavc\u0131o\u011flu looks to reassure markets that the CBRT will continue business as usual. Currency markets are far from reassured.<\/p>\n\n\n\n