Turkish President Recep Tayyip Erdoğan’s decision to reshuffle his economy team is indicative of growing political pressure on and within his ruling Justice and Development Party (AKP) in finding solutions to a persistent economic crisis in the country, freelance journalist Armen Tigranakert wrote in Modern Diplomacy on Sunday.
Erdoğan’s latest moves are in effect an acknowledgement of the failure in his economic policies over the past two years, Tigranakert said.
Earlier this month, Erdoğan removed central bank Governor Murat Uysal after a slump in the Turkish lira, appointing former Finance Minister Naci Ağbal as new head of Turkey’s monetary authority.
The dismissal of Uysal on Nov. 7 came the day after the lira fell to a record low. The lira has lost about a quarter of its value this year, making it one of the worst-performing emerging market currencies.
Turkish Treasury and Finance Minister Berat Albayrak, Erdogan’s son-in-law, unexpectedly quit the day after Uysal was replaced.
The Turkish political opposition have slammed the authorities for spending a significant portion of Turkey’s foreign exchange reserves to support the weakening lira, citing misguided economic policies.
Meanwhile, foreign investors are concerned that the lira will continue to depreciate after the inauguration of U.S. president-elect Joe Biden, which may strain relations between Turkey and the United States, Tigranakert said.
Any further inability by Ankara to deliver on vague promises to strengthen the lira would accelerate the depreciation of the currency, which would then exacerbate the country’s already fragile external financing position, he said.