:quality(80)/cdn-kiosk-api.telegraaf.nl/36e510d6-894f-11eb-a7ec-02d1dbdc35d1.jpg "Turkish president Erdogan fires central bank chief after rate hike | Financial")
Chairman Agbal had just been in office for five months. He will be replaced by Sahap Kavcioglu, a recognized opponent of interest rate hikes and a member of Erdogan’s AK party.
Since Agbal’s appointment on Nov. 7, the Turkish lira has risen more than 15% from its recent low of over 8.50 pieces against the iconic US dollar.
The central bank has increased interest rates to curb the rising prices and the decline of the lira. The price increases hit the wallets of Turkish consumers and businesses.
New surgery
This is the third time in a row that President Erdogan has intervened. He repeatedly calls on his central bank to keep interest rates low. In the summer of 2019, he already dismissed the chairman of the central bank when he came with an interest rate hike.
The Turkish currency has depreciated in recent years, which has led to significant price increases for consumers and businesses.
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Currency specialists report on Saturday that there will be immediate pressure on the Turkish lira when the markets open again.
Sahap Kavcioglu, previously active at the Halkbank and Vakifbank, argues that interest rate hikes will fuel long-term inflation.
Lof
Agbal hiked key policy rates this week by 875 basis points to 19%, the highest of any major economy. That intervention received praise from analysts, it would stabilize the Turkish economy.
The central bank’s intervention received praise from analysts. They found that Agbal had restored the credibility of the central bank.
Erdogan also withdrew Turkey on Saturday from the Istanbul Convention, which addresses the fight against violence against women and domestic violence. According to Erdogan’s ruling party AK, the content of the treaty is not in line with the traditional family values that Turkish society must pursue.
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