Turkish Lira Opens Sharply Lower After Sacking of Central Bank’s Chief

The Turkish lira opened sharply lower today compared to the Friday’s close after the news that Turkish President Recep Tayyip Erdogan sacked central bank’s governor Murat Cetinkaya, giving the office to his deputy instead.
While no official explanation for the decision was given, the general consensus is that the reason for the sacking was a refusal of the previous governor to lower interest rates despite the insistence from the president. That raised concerns that the new governor will cut interest rates despite extremely high inflation. More broadly, investors were concerned that the central bank will lose independence and thus the ability to react to challenges in a timely and appropriate manner.
USD/TRY traded at 5.7182 as of 12:53 GMT after closing at 5.6260 on Friday and opening at 5.7586 today. EUR/TRY was at about 6.4219 following the Friday’s close at 6.3181 and the Monday’s open at 6.4883.

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