The stock exchange in Istanbul fell sharply on Monday. The sharp fall in the price of the Turkish lira frightened investors.
The Turkish currency plummeted 15 percent against the US dollar after President Recep Tayyip Erdogan fired the boss of the country’s central bank on Saturday.
That decision came a few days after the Turkish central bank significantly increased interest rates to 19 percent to contain the rapidly rising inflation in the country. Turkey thus has the highest interest rate of the largest economies in the world.
The main index in Istanbul plummeted by 6.7 percent shortly after the market opened. The fired central bank president Naci Agbal has since been replaced by Sahap Kavcioglu.
Agbal had only been at the helm of the Turkish central bank since November and was a confidant of President Erdogan. He was seen as someone who could restore confidence in the lira, the worst-performing currency in the emerging countries.
As bank president, Agbal tried to bring down high inflation in Turkey by raising interest rates. However, Erdogan has repeatedly insisted on keeping interest rates low.