A Turkish economist for Al-Arabiya.net: On the edge of “turbulent” days

While Trading on the Istanbul Stock Exchange has been suspendedToday, Monday, the index fell to a minimum due to concerns With the collapse of the Turkish liraA well-known economist was of the opinion that “turbulent” days await the Turkish financial markets and the Turkish economy in the coming period.

The Turkish economist Khairi Kosanoglu based his expectations on this President Recep Tayyip Erdogan dismissed the central bank governor, Naji IqbalAnd instead, the appointment of Shehab Kawjioglu, which was “surprising” as he put it.

The economist said: “Naji Iqbal’s recent dismissal from his post was not to be expected, especially since we thought he had the approval of the Turkish President before he announced the financial decisions he was making, but it appears that Iqbal, when he said the 2% interest rate a few days ago, did not find an opportunity to communicate with Erdogan. Therefore, the latter was most likely fired from his job because he did not get his approval at the time. “

He added to Al-Arabiya.net: “In the current system of government of the President in Turkey, President Erdogan makes all the decisions”, which puts him in “direct responsibility for the various crises in the country, one of which is the economic problems.” . ”

He continued, “If the new central bank governor tries to cut interest rates sharply immediately, the Turkish lira will continue to collapse.” Koçioglu cannot resort to such a decision unless inflation rates have previously fallen. “

He believed that the job of the new governor of Turkey’s central bank was a great “test” of his experience, which indicated that he would not pass it easily.

In this regard, Kuzanoglu said: “Given the experience of the new governor, he lacks banking experience, which also makes his job very difficult and complicated.” He expected that he could not achieve stability between inflation rates and the exchange rate of the lira against foreign currencies.

He added that “the former central bank governor had already hiked interest rates by 875 points in the short term and therefore the steps his successor would take today no longer make sense, especially as confidence in the Turkish markets has waned.” Turbulent markets and economies are waiting for you. “

Turkey faces a new currency crisis after its president sacked the central bank governor and appointed Kavioglu, a former banker and deputy in the Turkish parliament, to the ruling Justice and Development party led by Erdogan.

Since mid-2019, the Turkish president has abruptly ousted three central bank directors in order to overcome the financial and economic crisis in his country.

And then The Turkish lira is down more than 17% against the US dollarToday, Monday, it made up some of its losses to 7.8 against the dollar.

The Turkish currency was trading at £ 8.47 against the dollar in Asia on Monday morning, compared with £ 7.22 against the dollar at the end of last week.

Turkey’s Finance Minister Lotfi Alwan said today that his country is determined to adhere to the free market rules and system of free currency circulation following the dismissal of the central bank governor, which caused the lira to drop to near record low levels.

In a statement, the Turkish minister announced that fiscal policy would support monetary policy in order to achieve price stability, adding that the macro-political framework will persist until inflation falls permanently, which is double-digit for most of the last four Years.

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