The Turkish Lira plummeted against major currencies after President Erdogan dismissed Central Bank Governor Naci Ağbal. Ağbal’s removal comes shortly after a larger-than-expected interest rate hike, intended to combat rising inflation.

Market Reaction

The currency’s sharp decline reflects investor uncertainty regarding the independence of the central bank and the government’s commitment to orthodox monetary policies. Analysts fear a potential reversal of recent efforts to stabilize the economy.

Key Concerns

• Erosion of central bank independence
• Potential for capital flight
• Increased inflationary pressures
• Impact on foreign investment

The situation remains fluid, and market participants are awaiting further signals from the new governor regarding the future course of monetary policy.