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Turkey’s newly appointed central bank governor sought to reassure markets on Sunday as investors braced for turmoil following the abrupt firing of his predecessor by President Recep Tayyip Erdogan.
Sahap Kavcioglu, a former member of parliament from Erdogan’s Justice and Development Party who was named to the post late Friday, said the bank’s main objective is to achieve “a permanent fall in inflation.”
In a statement, Kavcioglu outlined the importance of tackling inflation, saying it “will foster macroeconomic stability” by lowering borrowing costs and reducing “country risk premiums,” helping set the stage for sustainable growth.
The change in command atop the central bank—a day after it again raised interest rates—prompted concern among economists and investors about the trajectory of the economy in Turkey, an aspiring global power whose influence extends through the Middle East, Europe and beyond.
Economists were predicting a steep drop in the value of the Turkish lira
TRYUSD,
when markets open on Monday morning, as investors move to scale back their exposure to Turkish assets until the likely course of policy becomes clearer.
An expanded version of this report appears on WSJ.com.
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