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Turkish Lira Drops Anew After Erdogan Replaces Finance Chief

Bloomberg logoBloomberg 12/2/2021 Benjamin Purvis

(Bloomberg) -- Turkey’s lira weakened following news that President Recep Tayyip Erdogan had replaced the country’s finance minister, sending it back toward the record low set earlier this week when concerns about the central bank’s moves to lower interest rates prompted a selloff.

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The currency was around 13.43 per dollar as of 8 a.m. Thursday in Singapore, down 1.4% from the New York close, after news that Finance Minister Lutfi Elvan would leave his post. Nureddin Nebati, who has been a deputy finance minister since 2018 and is perceived to be close to former economy czar Berat Albayrak, will replace Elvan, according to a decree published in the Official Gazette.

Turkey's currency has been pummeled to a record low in recent days © Bloomberg Turkey's currency has been pummeled to a record low in recent days

The switch comes amid an ongoing rift over monetary policy that has seen the currency collapse to record lows, fueled by aggressive central bank interest-rate cuts that have been made in the face of inflation concerns. 

Video: Turkish Lira in Collapse Territory, Says Exante Data's Nordvig (Bloomberg)

The lira slumped to an unprecedented 13.9519 per dollar on Tuesday before staging a partial recovery Wednesday on the back of direct central bank intervention in currency markets. 

Read more on Turkey’s intervention to defend the lira

(Refreshes lira exchange rate)

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