- The Turkish President Sahap Kavcioglu fired three members of the Central Bank's Interest Ratio setting committee after meeting with Governor Recep Tayyip Erdogan on Wednesday evening. The lira traded against the dollar in a record low.
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What The Front Line is Those who removed deputy governors Semih Tumen and Abdullah Yavas, along with the Monetary Policy Committee member Ugur Namik Kucuk, according to the decree. He appointed Yusuf Tuna deputy governor and Taha Cakmak as an MPC member.
The changes follow a meeting between Erdogan and Kavcioglu on Wednesday evening, where the two discussed changes to the committee, people familiar with the discussion told Bloomberg earlier. Kavcioglu was the only member of the committee who voted last month against Kucuk s interest rate cut, according to people with knowledge of the matter. Yavas did not vote as he had contracted Covid - 19 in the U.S. where he lives.
Kavcioglu was appointed by Erdogan in March to lead the central bank, replacing his hawkish predecessor Naci Agbal. Last week, Erdogan s office refuted a media report that said Erdogan is cooling off Kavcioglu in the job.
Erdogan has described himself as an enemy of interest rates and adopted an unconventional theory that lowering interest rates will lead to lower inflation. The inflation rate was 19.6% in September, when Kavcioglu lowered the benchmark interest rate by 100 basis points to 18%.
The meeting between Kavcioglu and Erdogan came after the Turkish currency lira slipped to record low earlier on Wednesday, extending its losses to nearly 5% against the dollar since the governor released his surprise interest-rate cut on 23 September.
The Turkish presidency posted a picture of the two men along after the meeting on Twitter and Erdogan's office described the conversation as positive. The presidency also said the two men discussed the general economic situation.
The central bank declined to comment on details of the meeting.
The lira dropped on Thursday to a fresh record low of 9.1830 at 12: 38 in Istanbul, as it had been held for 24 hours.
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