The Turkish Lira nosedived against the U.S. dollar on Monday, as Turkey’s President Recep Tayyip Erdogan has fired the Governor of the central bank following his refusal to cut interest rates to help stimulate economic growth.
The Lira reached as low as 5.7849 against the greenback, falling around 2.9 percent from last week’s closing quote of 5.6228. Should the Turkish falls further, 6.5 is likely seen as its next support level.
So far this year, the currency had lost around 12.3 percent of its value against the dollar.
Governor Murat Cetinkaya, who has seen serving since April 2016, was dismissed on Saturday without giving reason for the move. Erdogan has repeatedly criticized Cetinkaya for high interest rates and called to lower interest rates to stem inflation.
The benchmark interest rate has been on hold at 24 percent since last September to support the plunge in the lira currency.
Cetinkaya’s dismissal sparked worries about central bank independence, which is vital for a stable economy.
Cetinkaya was replaced by Deputy Governor Murat Uysal, who is known as a dovish member of the bank’s interest rate setters.
In a statement on Saturday, the central bank said that it would “continue to independently implement monetary policy instruments.”
Uysal stated that the Bank’s communication channels would be utilized at the maximum level in order to achieve the price and financial stability goals.
The central bank’s monetary policy meeting is due on June 25, with economists widely expecting a rate cut to shore up the economy.