Jakarta, CNN Indonesia —
President Turkey Recep Tayyip Erdogan replaced the country’s finance minister on Wednesday (1/12) local time because of economic problems that caused the value of the Turkish currency, the lira, to plummet.
According to a presidential decree, Erdogan accepted the resignation of Turkey’s former finance minister, Lutfi Elvan, and appointed Nureddin Nebati as Elvan’s successor.
Elvan himself has served as Turkey’s Minister of Finance since November 2020. He was appointed to replace Erdogan’s son-in-law, Berat Albayrak, who served previously.
Citing AFP, Elvan’s job as finance minister for a year was hit by many crises.
Previously, Turkey’s central bank even intervened in the country’s market to boost the value of the lira, which fell nearly 30 percent against the US dollar.
As a result of Erdogan’s pressure, Turkey’s independent central bank official cut its key interest rate in November. This is the third time Turkey’s interest rates have been lowered in less than two months.
This interest rate cut comes when inflation in Turkey is almost 20 percent, four times the government’s target.
Erdogan believes that high interest rates will lead to high inflation. This view is in contrast to conventional economic thinking. Erdogan also insisted he would continue to keep interest rates low.
Erdoan assessed that this interest rate cut could increase export activities, investment and employment in Turkey.
Whereas, central banks usually raise interest rates when inflation spikes to stop the economy from overheating.
Since 2019, Erdogan has sacked three central bank governors who opposed his desire to lower interest rates.
The lira has lost more than 40 percent of its value against the dollar since the start of the year.
As a result of the decline in the value of the lira, many people criticized Erdogan’s policies. Opposition politicians in the Turkish parliament consider inflation to be leading Turkey to the darkest “catastrophe” in history.
Turkish netizens also voiced their frustration over this inflation on social media.
The topic “we are sinking” to “the government is stepping down” was trending on Turkish Twitter.
In addition, there are Turkish workers who directly exchange their salaries into foreign currency due to this inflation.
“I have asked for an advance on my monthly salary just to convert it into dollars so that I can maintain value in my income,” said Emirhan Metin, who works as a lawyer in Istanbul.
(pwn / bac)
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