Back in July 2019, when Turkey’s economy was in freefall and its inflation was soaring following a historic currency crash in mid-2018, and shortly after Erdogan became a de facto executive and unopposed ruler of Turkey, the Turkish president had a brilliant idea: take decades of monetary orthodoxy and flip them on their head. Faced with a lose-lose situation of slowing growth, runaway prices and a slumping lira, Erdogan conceived of what is now known as “Erdoganomics” or the bizarre epiphany that in order to fight inflation and keep the currency from plunging, all Turkey had to do was the polar opposite of what any other country in its position would do and cut rates, or as he put it, totally obliterating cause and effect, high interest rates cause inflation.
To implement this truly “unique” vision, Erdogan fired the then-governor of the Turkish Central Bank, Murat Cetinkaya, who inexplicably refused to cut rates at a time when Turkish inflation was surging, and replaced him with an obedient lapdog, Murat Uysal.
“We fired the previous central bank governor because he wouldn’t listen and we have decided to move on with our new friend,” Erdogan said in a speech at parliament in Ankara Tuesday. Erdogan said he told the new governor that “we are going to lower interest rates…”
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