Investors are right to be rattled by Turkey’s central bank purge

Euromoney Limited, Registered in England & Wales, Company number 15236090

4 Bouverie Street, London, EC4Y 8AX

Copyright © Euromoney Limited 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Investors are right to be rattled by Turkey’s central bank purge

The gradual erosion of institutional credibility could prove more damaging to Turkey than economic and political shocks.

Murat-Uysal-Turkey-CB-R-780.jpg

Murat Uysal, Turkey's new central bank governor



As autocrats around the world are well aware, emerging-market investors love stability. Give them a competent strongman with a dubious human rights record over a chaotic democracy any day.

A notable beneficiary of this phenomenon in recent years has been Recep Tayyip Erdogan, Turkey’s authoritarian president.

His firm grip on power – along with excellent demographics and a sturdy banking sector – has helped persuade investors to keep faith with Turkey through an attempted coup, successive stand-offs with Russia and the US, and last summer’s currency crisis.

So far, so good for the Turkish economy – if not for the academics, journalists and others who have got on the wrong side of the regime.

Confidence

The only problem is that investors don’t only prefer continuity in the presidential palace – they also want to see it in key institutions.

They like to see the same faces on roadshows and to get to know officials. Above all, they want to be confident there are at least one or two steady hands at the helm of the economy and that not all key policymakers are political placeholders.




Gift this article