Turkish lira volatile after central bank deputy head removed
Ten days after his appointment, Turkish central bank governor Sahap Kavcioglu sought to rebuild confidence in Turkey’s markets Tuesday following another shake-up in the bank’s top managers.
ISTANBUL — Turkish central bank deputy governor Murat Cetinkaya was removed by presidential decree early Tuesday, March 30, sparking a fresh bout of volatility in the Turkish lira after it slid 13% following the surprise replacement of the bank’s chief 10 days earlier.
Cetinkaya was replaced with Mustafa Duman, a former Morgan Stanley executive, in a move read by analysts as an attempt to restore the central bank’s credibility among investors, though initial market reactions sent the lira to near-record lows against major currencies before it settled around 8.32 per US dollar Tuesday evening, down 1.3% for the day.
The lira pared some losses after new central bank governor Sahap Kavcioglu said a “tight monetary stance” would remain in place during the bank’s annual general assembly meeting in Ankara Tuesday afternoon.
"We will continue to use all the tools we have, independently and effectively," Kavcioglu said Tuesday, underlining a commitment to bring the nation’s double-digit inflation down to the government’s target of 5%.
