How Erdogan’s unorthodox views rocked the Turkish market

While most central banks talk about tightening policy as the global recovery fuels inflation, Turkey cut its borrowing rate by 4 percentage points from September to November. causing the Turkish lira to fall. Erdogan, on November 22, explained that by lowering the exchange rate, Turkey is prioritizing greater investment, exports and job creation in the hope of curbing inflation. Months earlier, in March, Erdogan fired central bank Governor Naci Agbal just days after he raised interest rates. His replacement, Sahap Kavcioglu, the country’s fourth central bank governor in less than two years, is known as a proponent of lower rates. In October, Erdogan used a midnight decree to fire three members of the monetary policy committee who were wary of further rate cuts. And in 2019, Erdogan sacked another governor, Murat Cetinkaya, for not following his policies.