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Turkey fires central bank governor after interest rate hike

Published: Updated:

Turkey fired the governor of its central bank and replaced him with economist and former ruling party lawmaker Sahap Kavcioglu, according to a presidential decree published late on Friday.

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Former finance minister Naci Agbal, seen as a market-friendly figure, had only been in the position since November, when he was appointed by President Recep Tayyip Erdogan as part of an overhaul of his economic team.

Agbal’s dismissal comes after the central bank on Thursday sharply hiked its main interest rate to 19 percent.

Erdogan is a strong opponent of high interest rates and once called them the “mother of all evil”.

Economists blame Erdogan’s unorthodox belief that high interest rates cause inflation -- instead of slowing it down -- for many of Turkey’s current economic problems.

Kavcioglu is the fourth central bank head appointed since July 2019.

News of Agbal’s replacement came after the markets closed on Friday.

The Turkish lira has clawed back roughly 15 percent of its value against the dollar since Agbal was appointed in November.

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