Erdogan chooses low-interest advocate as minister amid falling lira

the president of the turkey central bank signaled on Thursday that aggressive easing of monetary policy will likely be paused in January, after another interest rate cut this month, according to participants in an investor conference call held after the lira’s historic liquidation.

Separately, the country’s president, Tayyip Erdogan, chose Nureddin Nebati, a strong supporter of its low-interest policy, as finance and treasury minister after Lutfi Elvan, who was seen as a more orthodox official, resigned.

The lira had little change, standing at 13.42 to the dollar this morning.

The currency has stabilized since the central bank intervened on Wednesday to calm “unhealthy” market movements after a 30% dip last month, the second worst in Turkish history.

On the monthly conference call, central bank president Sahap Kavcioglu — appointed by Erdogan in March — told local investors there was limited room for another interest rate cut this month, four meeting participants told Reuters.

“I got the impression that he’s going to take a break (in monetary easing) and wait for some time in 2022 after a final limited cut in December,” said one participant who requested anonymity.

Kavcioglu signaled that the bank is “almost gone for now,” said another participant in the conference call, which was closed to the press.

In its monetary policy statement last month, when it cut interest rates by 1 percentage point, the bank said it would consider using its “limited” space to further reduce borrowing costs at its next meeting on Dec. 16.