Did Erdogan commit economic suicide by sacking central bank chief?
The predicaments of Turkey’s cash-strapped central bank augur a highly challenging period for Erdogan while reducing the visibility range in Turkey’s economy to almost zero.
President Recep Tayyip Erdogan’s shocking decision to appoint a new central bank governor — the fourth in 20 months — has plunged Turkey’s ailing economy into deeper turmoil, marked simultaneously by high interest rates and a tumbling currency, at a time when the central bank’s foreign reserves are already in the red. How and why Erdogan made such a grave move akin to economic suicide remains open to debate, but a risky plan for snap elections might be underlying his calculus.
It was only in early November that Erdogan had replaced the central bank governor with a trusted member of his Justice and Development Party (AKP) — former Finance Minister Naci Agbal — in a bid to rein in the slump of the Turkish lira and curb dollarization. Agbal was well on course to restore some confidence in the markets when Erdogan sacked him with an overnight decree March 20, offering no explanation for the move.
