The Turkish President Recep Tayyip Erdoğan, who is under pressure due to the tumbling national currency and the associated economic problems, is replacing the finance minister. Lütfi Elvan leaves office after just over twelve months and is replaced by Nureddin Nebati, according to an official announcement on Wednesday evening.
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, but without much success.
Turkey’s currency has been on the downtrend for a long time, and the country’s economy is suffering severely as a result. 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 take their hats.