It may not be a good idea to mix politics with economic issues. That is what Turkish President Recep Tayyip Erdogan seems to be doing in the past few years. His attempts to strengthen the national currency, the Turkish lira, turned out to have an opposite effect. Thus, the President has recently fired the country’s central bank chief, less than five months after his appointment. The Central Bank of the Republic of Turkey has long lost the reputation of an independent regulator. Mr. Erdogan has repeatedly meddled in the central bank’s activities: this was the third central bank governor fired by Erdogan in two years. However, the Turkish lira did not appreciate such a move. For a long time, the lira has been falling and testing new lows. Right after the dismissal of Naci Agbal, the national currency depreciated by a record 10.79%. Erdogan’s despotic decision has shocked investors who were just getting used to the new central bank’s chief and considered his monetary policy quite favorable for the markets. Unfortunately, this market-friendly period did not last long. Sahap Kavcioglu has been appointed the new head of the central bank. Last November, Turkey's finance minister and Erdogan's son-in-law Berat Albayrak also resigned.
