Over the weekend Turkey's President Erdogan sacked the head of the country's central bank after a rate hike.

  • hike of 200 points on Thursday
  • took the rate to 19%, higher than analysts expected

Governor Naci Agbal was in the job for only 4 months and had been finance minister in a previous job.

Quite the move!


Long lira had become a popular trade when the new governor was appointed 4 months ago - Agbal was hiking to fight inflation and to try to restore credibility to the central bank. Lira bulls had expected rate to rise further and were comfortable being long. That's shot to pieces now.

Agbal's replacement (Sahap Kavcioglu) has said he'll use monetary policy tools to ensure price stability. Given what just happened to Agbal this is likely an empty promise.