Turkish President Recep Tayyip Erdogan appointed a new finance minister on Wednesday evening after the turbulent weeks that the Turkish economy has had. As a result, the lira has plummeted, and inflation has risen sharply.
In a presidential decree issued at midnight local time on Wednesday, the head of state replaced his finance minister, Lutfi Elvan, with Nureddin Nebati, his deputy minister. Elvan has been Minister of Finance since November 2020.
Earlier in the day, the Turkish central bank sold foreign exchange reserves for the first time in seven years. It is trying to counter the decline of the Turkish lira against the dollar.
According to the central bank, the intervention was necessary because of the market’s ‘unhealthy pricing’. After the intervention, the lira initially recovered somewhat from recent losses.
Erdogan had talked the lira down a bit during a TV interview on Tuesday evening. He promised lower interest rates until the elections in 2023, even though most economists agree that this will further fuel the already high inflation in Turkey.
The lira has been in free fall for some time, putting the Turkish economy under tremendous pressure.