Turkish President Tayyip Endorgan replaced his finance minister to Nureddon Nebati following the resignation of Lutfi Elvan because of his opposition to Endorgan’s monetary policy.
Endorgan’s approach to low interest rates to curb rising inflation in Turkey has pushed the lira to an all -time low in the past month.
This is also in contrast to measures taken by central banks around the world that tightened monetary policy amid economic recovery from the coronavirus pandemic and rising inflation.
Lutfi Elvan, who just took over the post in November 2020, had previously called on every institution to do its part to ease price increases.
A day later, Endorgan slammed his colleagues who were still defending high interest rates, saying, “I can’t be on the same path as those officials”.
Endorgan has often reiterated its position that high interest rates cause inflation to rise and not to curb it.
Endorgan’s decision to lower interest rates since September has pushed inflation -adjusted government bond yields lower below zero, while consumer prices rose to 19.9% in October.
At the time of writing, the Turkish lira is trading hovering at a low of 13.43 against the US dollar.
