Turkish President Recep Tayyip Erdogan on Wednesday night appointed a new finance minister amid the turmoil in the Turkish economy over the past few weeks, the new collapse of its currency and the soaring rise in inflation.
In a presidential executive order issued at midnight, the head of state replaced Finance Minister Lutfi Elvan with Deputy Foreign Minister Nureddin Nebati.
According to the presidential decree, Mr. Erdogan accepted the resignation submitted by Mr. Elvan and appointed Mr. Nebati in his place.
Mr. Elvan succeeded Berat Albayrak, Mr. Erdogan’s son-in-law, after his resignation in November 2020.
His appointment had been welcomed by employers’ organizations and analysts.
#BREAKING Turkey replaces Treasury, Finance Minister Lutfi Elvan with Nurettin Nebati: Official Gazette
— ANADOLU AGENCY (@anadoluagency) December 1, 2021
But his tenure was marked by crises.
Yesterday morning, the Turkish central bank intervened to stop the free fall of the Turkish pound, which lost 30% of its value against the dollar within a month.
As the president wished, the institution – officially independent – reduced its guiding interest rate in November (from 16 to 15%) for the third time in two months, at a time when inflation is approaching 20% year-on-year. four times the target of the government.
Contrary to traditional economic theory, President Erdogan says high interest rates lead to price increases. He assures that their reduction supports production and exports.
From 2019, Mr. Erdogan fired three central bank governors who opposed his desire to see interest rates fall.
Within 2021, the Turkish pound lost 40% of its value against the US dollar
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