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TRY Craters on CBRT Shock

The USD keeps moving higher against the Turkish Lira since President Erdogan fired the country’s central bank governor, Murat Cetinkaya, earlier in the week.

Cetinkaya had been governor of the CBRT since April 2016. However, Erdogan has long been opposed to the displaced head of the CBRT due to his program of raising interest rates.

Erdogan has been very vocal in both his support for lower interest rates in Turkey as well as his opposition to Cetinkaya. He even went as far as to describe interest rates as the “mother and father of all evil” and had long called for the CBRT to lower rates.

CBRT Raised Rates Against President’s Wishes

Despite Erdogan’s opposition, the CBRT had been pressing ahead with its policy of monetary policy tightening. The bank last lifted rates in September 2018 with a huge hike from 17% to 24%. The bank stated that a:

“Tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant impr...

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