Turkish President Appoints New Finance Minister After Son-In-Law Quits

Naci Ağbal

The demonstration came on the heels of the surprise statement of Finance Minister Berat Albayrak, on Sunday, that he had resigned for health reasons. It was the biggest one-day rally since the currency rebounded from a record low in August 2018, a month after Albayrak became finance minister.

His resignation follows the dismissal over the weekend of central bank chief Murat Uysal and his replacement by former Finance Minister Naci Agbal.

Timothy Ash, an emerging markets analyst at BlueBay Asset Management, questioned whether Albayrak's health was the real reason for him quitting and suggested a "purge of Albayrak and his team".

Albayrak's term was characterised by mostly futile efforts to control the value of the currency without resorting to raising interest rates, in line with Erdogan's widely discredited view that higher interest rates lead to higher inflation.

The lira also rebounded 5% to 9.6% against the euro, after peaking near 10.2 last week. Television networks, mostly owned by businesses close to the presidency, had studiously ignored the departure of the government's economic policy-maker.

The failed defence was maintained while the central bank kept following Erdogan's wishes not to raise the main interest rate.

"After serving in ministerial posts for almost five years, I took the decision not to continue my duty (as finance minister) due to health issues", Albayrak wrote. It was not clear what made Erdogan change his mind.

Interior Minister Suleyman Soylu's resignation earlier this year was not approved by the Turkish president.

Many people in Turkey, including some officials in Erdogan's AK Party, believed the president was grooming the 42-year-old former businessman as a future party leader and even as possible successor.

The central bank will decisively use all policy tools in pursuit of its price stability objective, Agbal added.

The lira has lost nearly 30% of its value against the dollar this year, with markets anxious about a persistently high inflation rate that remains in double digits.