Turkish Finance Minister Resigns as Economic Crisis Worsens

New Finance Minister Lutfi Elvan (C) speaks to media after a ceremony marking the 82th anniversary of the death of Mustafa Kemal Ataturk at the mausoleum in Ankara, 10 November 2020. Photo: EPA-EFE/STR

The Official Gazette on Thursday wrote that Elvan's resignation had been accepted by President Erdogan and that he had been replaced by his deputy, Nureddin Nebati, a staunch Erdogan supporter.

"My Allah [God], make it easy, do not make it difficult. My Allah [God], make its outcome beneficial. Give us truth in our work, make us successful," Nebati tweeted on Thursday.

"God grant me the ability to carry out the duty of the Minister of Treasury and Finance, which our President deemed worthy of me, and to be worthy of the trust he has shown in us," he continued.

President Erdogan has persisted with his new economic model, which is based on low interest rates, designed to stimulate the economy. However, it has resulted in soaring inflation and a collapse in the value of the currency.

The Turkish lira lost more than 81 per cent of its value against the US dollar in 2021, 44 per cent in November alone.

Most experts say the model has no grounding in modern economic theory and just causes high inflation and financial instability.

Elvan was seen as the last key figure within Erdogan's inner circle who still believed in orthodox economics, and he had a good reputation among industrialists and on international markets.

Erdogan, meanwhile, shows no sign of backing down. Last month, addressing his ruling Justice and Development Party, AKP, in parliament, he said that he cannot walk alongside those defending higher interest rates.

"Interest rates are the cause, and inflation is the result. Our friends who defend interest...