Turkey's Erdogan Ousts Central Bank Chief

President Erdogan unexpectedly replaced the Central Bank of Turkey's governor, using his executive powers. This move has raised concerns about the central bank's independence and its ability to manage inflation and interest rates effectively. The Turkish lira has weakened against the US dollar, reflecting investor uncertainty. The new governor faces challenges in maintaining economic stability and credibility.

What was the unexpected action taken by President Erdogan regarding the Central Bank?

• He increased interest rates.

• He replaced the Central Bank governor.

• He dissolved the Central Bank.

• He introduced a new currency.

What was a significant characteristic of the Central Bank's policy during the previous governor's term?

• Lack of independence

• High interest rates

• Rapid currency appreciation

• Strong investor confidence

How did the Central Bank's low interest rates affect inflation?

• It led to a rapid increase in inflation.

• It had no effect on inflation.

• It caused inflation to decrease.

• It stabilized inflation.

What was the immediate effect on the Turkish lira following the Central Bank governor's dismissal?

• The lira depreciated against the dollar.

• The lira was unaffected.

• The lira remained stable.

• The lira appreciated against the dollar.

What challenge does the new Central Bank chief face?

• Introducing a new currency

• Restoring investor confidence

• Opposing President Erdogan

• Increasing interest rates