Turkey’s Central Bank Chief May Have Little Time to Repair Trust
- Fate of predecessors shows legacy sealed in first week of term
- Lira’s plunge suggests traders want stronger pledge on rates
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If the experience of Sahap Kavcioglu’s most recent predecessors is any indication, Turkey’s new central-bank chief has little time left to win back the trust of foreign-exchange traders -- or he may lose it forever.
In the past three instances when President Recep Tayyip Erdogan replaced the governor, the reaction of the currency markets in the first week of the new incumbent’s tenure set the tone for his entire term. Which is why the lira’s plunge this week -- notwithstanding Kavcioglu’s pledge to maintain policy continuity -- is so telling.