Another Day, Another Purge at Turkey’s Central Bank
A wave of firings at Turkey’s central bank is bad news for the lira and whatever shred of credibility the institution has left, as it swings between fighting inflation and stoking it on the president’s whim.
The “enemy” of interest rates.
Photographer: Adem Altan/AFP/Getty Images
Heads are rolling at Turkey’s central bank, this time for not lowering interest rates aggressively enough. Deeper cuts will likely come, perhaps as soon as next week. This is a dangerous game when most of the world is moving in the opposite direction. An already battered currency is unlikely to fare well, and whatever fragment of credibility that monetary policy has left in this iconic emerging market will be eroded.
Purges are a sad fact of life at the Central Bank of the Republic of Turkey. President Recep Tayyip Erdogan is on his fourth bank governor since 2019. In the latest clearing out, Erdogan dismissed two deputy governors and a Monetary Policy Committee member who either opposed or were perceived to be less than enthusiastic about the surprise rate reduction delivered on Sept. 23. The firings were announced midnight Thursday.