The new central-bank boss is making changes. But President Erdogan still calls the shots
For someone thought to be the second-most-powerful person in Turkey and a possible successor to President Recep Tayyip Erdogan, it was an unseemly exit. In a statement posted on Instagram on November 8th and riddled with grammatical mistakes, Berat Albayrak, the president’s son-in-law, said he was stepping down as finance minister and leaving politics. It took Mr Erdogan and his officials over a day to digest and confirm the news. It took another day to name Lutfi Elvan, a former deputy prime minister, as his replacement.
Mr Albayrak, popularly referred to as the damat (son-in-law), said he was leaving for health reasons. But insiders blame a feud with the new central-bank governor, Naci Agbal, who had criticised the minister’s record. Mr Agbal had been appointed only a couple of days earlier, after Mr Erdogan ousted his predecessor, Murat Uysal, without giving an explanation. (Mr Uysal is the second head of the central bank to be sacked in as many years.) Mr Albayrak was reportedly not briefed on the decision.
Mr Albayrak’s management of the economy was even worse than his grammar. As the minister and his father-in-law leaned on both the central bank and commercial lenders to keep borrowing rates low, the lira set one record low after another. Between the damat’s surprise appointment in 2018 and his shock resignation, the currency lost 46% of its dollar value, eating away at Turks’ buying power. Instead of raising interest rates the central bank sold dollar reserves to relieve pressure on the lira. It threw in the towel this summer, but only after squandering more than $100bn, and had begun to use a byzantine system of multiple interest rates to tighten the money supply indirectly. For his part, Mr Albayrak laughed off concerns about the currency collapse. “For me, the exchange rates are not important at all,” he told reporters in September. “I don’t look at that.”