Erkan, a former co-CEO of a U.S.-based bank, becomes Turkey's first woman central bank governor.Įconomists say, however, that it's not clear to what extent Erdogan, who has ruled the country with a tight grip, will give Erkan and Simsek free rein. In another sign, Erdogan on Friday appointed Hafize Gaye Erkan to lead the central bank, taking over from the current chief who has championed rate cuts since 2021. ![]() Simsek said Turkey had no other option but to return to “rational ground." In a sign that Erdogan’s new administration might pursue more conventional economic policies, Simsek also said there were no “shortcuts or quick fixes” but vowed to oversee Turkey’s finances with “transparency, consistency, accountability and predictability.” Hours after being sworn in, Erdogan announced that Mehmet Simsek, a former Merrill Lynch banker who had previously served as his finance minister and deputy prime minister, would return to the Cabinet after a five-year break from politics. In other policy considered to be unorthodox, economists say the government aggressively intervened in the markets to prop up the lira ahead of the elections, depleting Turkey’s foreign currency reserves to keep the exchange rate under control. Inflation eased to 39.5% last month, according to official figures, but an independent group says the true number is more than double that. The bank has cut its key policy rate from around 19% in 2021 to 8.5% now, even as inflation hit a staggering 85% last year. Turkey has been plagued by a currency crisis and skyrocketing inflation since 2021, which economists say are the result of Erdogan’s unorthodox belief that raising interest rates will increase inflation.Ĭonventional economic thinking - and the approach being taken by central banks around the world - calls for the opposite: rate hikes to control price spikes.Įrdogan has exerted pressure on Turkey’s central bank to lower borrowing costs. Here’s a look at the falling value of the lira, what lies ahead for the economy and how people have been affected: Soon my income won’t pay the rent,” said Sureyya Usta, a 63-year-old who lives in Ankara. ![]() It has raised fears of even higher prices for people already struggling to afford basics like housing and food amid high inflation. The Turkish lira has now weakened by around 20% against the dollar since the start of the year. The longtime leader appointed an internationally respected former banker as finance and treasury minister and on Friday named a former co-CEO of a U.S.-based bank as head of the central bank.īut lingering uncertainty over Erdogan’s economic direction and an apparent move to loosen government controls of foreign currency exchanges have led Turkey's currency to plunge to record lows against the U.S. ANKARA, Turkey (AP) - Turkish President Recep Tayyip Erdogan won reelection last month despite a battered economy and a cost-of-living crisis that experts say are exacerbated by his unconventional economic policies.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |