We are talking about Turkey, now in financial chaos: after the intervention of the central bank to calm the collapse of the lira, there was a change in the Ministry of Finance. The details.
Turkey has a new finance minister: the appointee resigned and was replaced by a loyalist of President Recep Tayyip Erdogan in the midst of an abrupt slump.
Lutfi Elvan, who was considered the last voice of economic orthodoxy in the Turkish leader’s cabinet, has asked to be relieved of his duties, according to the country’s Official Gazette.
After weeks of rumors that he was trying to resign, the former technocrat was replaced by Nureddin Nebati, who last week made a passionate public defense of Erdogan’s policy on cutting interest rates despite rising inflation.
Turkey appears to have plunged into chaos.
New finance minister in Turkey: what’s up?
Turkish President Erdogan has appointed Nureddin Nebati Minister of the Treasury and Finance, following the resignation of Lutfi Elvan, the last senior official seen adhering to Orthodox politics in a government gripped by a currency collapse.
The appointment, announced in the Turkish Official Gazette, follows the fall of the national currency of 27% in the last month alone. It hit a series of historic lows in the direction of economic policy.
Nebati, who served three years as deputy finance minister prior to his appointment, said Turkey had been trying to implement a low rate policy for years but faced strong opposition.
“This time, we are determined to implement it,” he tweeted, adding that there was no problem keeping interest rates low under current market conditions.
The alignment with Erdogan’s theory is therefore total. Meanwhile, however, this financial approach is causing nervousness and some turmoil for the emerging economy.
The lira has lost nearly 40% of its value since the beginning of September when the president pressed the central bank to cut rates repeatedly, lowering its key rate to 15% despite the annual inflation close to 20 per cent.
This approach has prompted economists to warn that the government risks causing runaway inflation and financial instability.
Meanwhile, the central bank said on Wednesday 1 December that “unhealthy price formations” led to the decision to sell hard currencies, including the US dollars, in an attempt to support the lira.
Turkey remains in the spotlight of analysts and investors, especially foreigners.
