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The appointment of former Finance Minister Naci Ağbal after the President’s Decree published in the Official Gazette at night and the appointment of the President of the Central Bank (CBRT), Murat Uysal, has been echoed around the world.
British Financial Times newspaper, “Erdogan liquidated the governor of the Central Bank after the big depreciation in TL” used the title.
“THE PERIOD OF OPERATION IS 4 YEARS BUT …”
Recalling that TL’s depreciation against the dollar exceeded 30 percent this year, the newspaper stated that Uysal’s normal term was 4 years, but he was removed in 16 months and no justification for the decision was announced.
Despite double-digit inflation, Erdogan wanted to keep interest rates low to stimulate economic growth, and investors criticized Uysal for keeping interest rates low despite TL’s depreciation. “Concessions made to Erdogan” The newspaper noted that in the Uysal period, the policy rate fell from 24 percent to 8.5 percent in one year and increased by 200 basis points after the sharp drop in LT in September 2020, but then it was hardened by other means rather than political interest. did.
“IT CAN INCREASE ANXIES”
FT recalled that Uysal’s predecessor, Murat Çetinkaya, was also fired in July 2019 on the grounds that he did not lower interest rates, and used the following statements:
“The final firing decision will likely raise concerns about Erdogan’s intervention in monetary policy at the normally independent central bank.”
BLOOMBERG: AĞBAL HAS NOT WORKED AT THE CENTRAL BANK BEFORE
The US financial agency Bloomberg recalled that Naci Ağbal, who was appointed to replace Uysal, was finance minister in the past, but has never worked at the CBRT.
Bloomberg stated that Uysal was fired after weeks of depreciation at TL and noted that Uysal was able to stay in the position for just over a year.
“Uysal has been increasing borrowing costs with interest rate hikes and back door measures since August, but it did not provide enough support for TL or to contain inflation. Inflation in double digits while the target is 5 percent errant statements were produced.
“THE UNCOMFORTABLE POSITION OF AĞBAL”
Ağbal’s efforts to stabilize the TL It will remain in an uncomfortable position to balance investor expectations and Erdogan’s demands. The agency stated that Erdogan believes that “interest is the cause of inflation” but that the majority of central bankers around the world are in the opposite direction.
On how to discharge the interest of the former president, he recalled that his dismissal for reasons that comply with the request of the minister to Bloomberg, recalled the interest of Uysal 9 1575 bps in the total discharge of meetings that Turkey and the debt costs adjusted for inflation in the world They rank among the countries at the lowest levels in the world.
In the news, which indicated that rate cuts provided much-needed support to the economy during the epidemic, but increased inflation and put pressure on the TL, the all-time low against the dollar was 8.57. It was noted that the TL is the currency of the developing countries with the worst performance against the dollar this year.
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