Turkish Lira Plunges After Erdogan Fires Central-Bank Chief

Turkey’s currency tumbled almost 8% on Monday, putting it on course for its biggest single-day selloff since 2018, following the abrupt ouster of the central-bank governor last week, the Wall Street Journal reported. The lira fell to as low as 8.280 a dollar from 7.219, before regaining some ground to trade at about 7.7865 a dollar, according to FactSet. Turkey’s stocks also plunged. The turmoil comes after President Recep Tayyip Erdogan on Friday unexpectedly fired Naci Agbal, the central-bank governor who had repeatedly raised interest rates in an effort to tame inflation since his appointment in November. Foreign investors say the move renewed concerns that the central bank has lost its independence from political influence, diminishing policy makers’ credibility and sapping appetite for Turkish assets. The new governor, Sahap Kavcioglu, Sunday tried to reassure markets by saying taming inflation is the bank’s main objective. He also pledged to foster economic stability by lowering borrowing costs and bolstering growth. Money managers are concerned that he might allow the currency to depreciate, and accept elevated inflation levels, to lower interest rates. Read more. (Subscription required.)