AKP officials say Finance Minister may leave post soon

Basing its report on backstage rumors, daily Cumhuriyet has quoted ruling AKP officials as saying that Turkish Treasury and Finance Minister Lütfi Elvan might soon resign from his post as he has drawn the wrath of Erdoğan over his determination in fighting inflation.

Finance Minister Lütfi Elvan (C) chose not to applaud Erdoğan as the president vowed to keep fighting interest rates during a speech addressing his AKP MPs on Nov 17

Duvar English

Ruling Justice and Development Party (AKP) officials have allegedly said that Treasury and Finance Minister Lütfi Elvan might soon resign from his post as he drew the condemnation of President Recep Tayyip Erdoğan over his remarks on tackling inflation.

Basing its report on backstage rumors, daily Cumhuriyet quoted AKP officials as saying: “Erdoğan got mad at Elvan's remarks at the Parliament Commission and in Istanbul. It would not take long; his dismissal from the position would come soon.”

Elvan addressed the Parliament’s Planning and Budget Committee on Nov. 12, saying the government remained focused on achieving price stability and preventing further slides in the lira.

“The comments that our government is aiming for a high exchange rate in order to support exports are not true,” he said. “Turkey is implementing a floating exchange rate regime, the value of the exchange rate is also determined by the market.”

Just four days later, during a speech at the Turkish Capital Markets Congress in Istanbul, Elvan said that his ministry showed determination in fighting inflation, taking timely macroprudential measures when necessary.

“We are not at the desired level with regards to inflation. The prerequisite of our desired growth level goes through price stability...As long as we are determined in the struggle against inflation, the exchange rate will stabilize, and the risk premium will fall in the country,” Elvan said on Nov. 16.

On Nov. 17, Erdoğan addressed his AKP lawmakers in parliament, saying that he can't walk alongside those defending interest rates. 

"Interest rates are the cause and inflation is the result. Our friends who defend interest rates should not be offended, but I can't walk together with those defending interest rates," Erdoğan said. 

"What's happening to our friends?" Erdoğan asked, in remarks which AKP officials said were pointing to Elvan.

While all of the AKP lawmakers were seen on cameras applauding Erdoğan over his speech, it was just Elvan who did not applaud the president. 

Meanwhile, the country's central bank slashed its policy rate by 100 basis points to 15% on Nov. 18. 

The bank hinted at more easing despite inflation running near 20%, accelerating a spiral to all-time lows in the lira currency.

The bank, seen as bowing to Erdoğan's calls for stimulus despite the risks, extended as expected an easing cycle that began in September when the one-week repo interest rate was lowered from 19%.

The lira tumbled versus the dollar after the rate decision to 10.98, down 3% and matching a record low hit earlier in the day. It was worth 10.85 at 1129 GMT.

Erdoğan appointed Elvan as the Treasury and Finance Minister in November 2020 after his son-in-law Berat Albayrak's abrupt resignation.