Turkey: Erdoğan exchanges finance ministers again amid lira chaos

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Recep Tayyip Erdoğan

Photo: UMIT BEKTAS / REUTERS

The Turkish President Recep Tayyip Erdoğan, who has come under pressure due to the sharp decline in the national currency and the associated economic problems, is replacing the finance minister.

Lütfi Elvan leaves the post after just over twelve months and is replaced by Nureddin Nebati, according to an official announcement on Wednesday evening.

In just one month, the lira had lost almost 30 percent of its value against the dollar, and inflation is now almost 20 percent.

This is rapidly reducing the income and savings of the Turks, puts many households in distress and even means that it is difficult to find imported medicines.

The exchange rate of the lira against the US dollar slipped temporarily to 13.87 lira yesterday, but then recovered to 12.42 lira - an increase of more than eight percent on the day.

That was also due to the central bank.

According to its own information, this intervened directly in the foreign exchange market - "through sales transactions due to unhealthy price formations in exchange rates."

The decline in the Turkish lira had recently accelerated, and Erdoğan's interview with the state broadcaster TRT on Tuesday evening, in which he had promised lower interest rates until the elections planned for 2023, caused additional pressure.

On this Wednesday, the Turkish central bank then intervened in the foreign exchange market to support the local currency, the lira.

Many central bankers have already had to leave

Turkey's currency has been under pressure for a long time, and the country's economy is suffering from it.

The background to this is Erdoğan's interference in the monetary policy of the central bank.

Contrary to all common economic sanity, the president takes the view that high interest rates promote inflation.

Many central bankers who more or less opposed Erdoğan's views have already had to vacate their posts.

jok / dpa