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Erdogan Dismisses 3 Central Bank Members, Lira Hits Record Low

Erdogan Dismisses 3 Central Bank Members, Lira Hits Record Low

Thursday, 14 October, 2021 - 07:00
Turkish President Recep Tayyip Erdogan (AP)

Turkey's President Recep Tayyip Erdogan dismissed three central bank monetary policy committee (MPC) members on Thursday, appointing two new members in their place, the country's Official Gazette said, sending the lira to fresh record lows.


It said those dismissed were deputy governors Semih Tumen and Ugur Namik Kucuk, along with another MPC member, Abdullah Yavas.


Erdogan appointed Taha Cakmak as a deputy central bank governor and Yusuf Tuna as an MPC member, it said.


The lira weakened to a record low of 9.1900 against the dollar after the announcement, a loss of 1% on the day. It has weakened about 19% so far this year, driven by concerns about monetary policy.


The MPC overhaul came after the presidency said on Wednesday evening that Erdogan had met Central Bank Governor Sahap Kavcioglu, publishing a photo of Erdogan standing next to him.


Last month the central bank cut its key rate to 18% from 19% despite annual inflation of nearly 20%, in a move analysts viewed as fresh evidence of political interference by Erdogan, a self-described enemy of interest rates.


Kavcioglu said this week that the rate cut was not a surprise and had little to do with the subsequent lira sell-off.


The bank's next policy-setting meeting is on Oct. 21.


Last week, three sources familiar with the matter said Erdogan was losing confidence in Kavcioglu, less than seven months after he sacked Kavcioglu's predecessor, and that the two had communicated little in recent weeks.


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