Şahap Kavcıoğlu

President Tayyip Erdogan on Friday appointed Hafize Gaye Erkan, a finance executive in the United States, to head Turkey's central bank, which is widely expected to reverse course and tighten policy after years of rate cuts and a simmering cost-of-living crisis.

Alamy Photo

The Turkish Lira sank to a new low against the dollar yesterday, more than a week after the reelection of President Recep Tayyip Erdoğan.

The currency, which was propped up by the Central Bank before the presidential election, fell 6.7 percent to 23.16 liras per dollar in the afternoon trade.

Turkey's lira plunged 7% to a record low on Wednesday in its biggest daily selloff since a historic 2021 crash, as the newly-elected government appeared to loosen stabilizing measures in its pivot to more orthodox policies.

The lira has come under pressure since President Tayyip Erdogan was re-elected on May 28. It stood at 22.98 against the dollar at 0735 GMT.

The foreign exchange position of the corporate sector has improved with the liraization of their balance sheets, while the share of the Turkish Lira in households' financial balance has increased significantly, in this way financial resilience indicators of firms and households remain strong, the Central Bank's governor Şahap Kavcıoğlu has said in the bank's biannual Financial Stability Report.

Türkiye's Central Bank has kept its inflation projections for end-2023 and end-2024 unchanged at 22.3 percent and 8.8 percent, respectively.

Despite the effects of external shocks, Türkiye is experiencing a gradual disinflation process step by step, Central Bank Gov. Şahap Kavcıoğlu has said.

"With the support of the policies we have implemented, the disinflation process has begun," Kavcıoğlu said at a meeting of the Ankara Chamber of Industry.

The Central Bank has not changed its 2023 inflation forecast and maintained its year-end consumer price index at 22.3 percent.

The Central Bank has lifted its end-2022 inflation forecast from a previous 60.4 percent to 65.2 percent.

The bank also increased its estimate for end-2023 from 19.2 percent to 22.3 percent but kept the forecast for 2024 unchanged at 8.8 percent.

Despite the unfavorable developments globally, there are no risks to food supply security in Türkiye thanks to measures in place, said the Food and Agricultural Products Monitoring and Assessment Committee in a statement on Sept. 14.

The Turkish Central Bank is using a determined strategy to ensure a consistently rising interest in the Turkish Lira, Şahap Kavcıoğlu, the bank's governor, has said.