Erdogan’s new dove: Five questions for Turkey’s central bank By Reuters – Investing.com

Erdogan’s new dove: Five questions for Turkey’s central bank By Reuters – Investing.com

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© Reuters. FILE PHOTO: Turkey's new Central Bank Governor Kavcioglu in Ankara

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By Jonathan Spicer and Marc Jones ISTANBUL (Reuters) - Turkey's fourth central bank chief in less than two years will oversee his first policy decision on Thursday, after President Tayyip Erdogan rocked financial markets by firing a well-respected governor who had hiked rates just last month. Erdogan replaced Naci Agbal, a policy hawk, with Sahap Kavcioglu, who has openly criticised Turkey's tight monetary stance and who shares the president's unorthodox view that high interest rates cause inflation. The shock decision on March 20 raised expectations that the policy rate, now at 19%, would soon be cut and sent investors fleeing, knocking the lira 12% lower. For many analysts, Erdogan's latest intervention has left the bank's credibility in tatters. Here are five questions ahead of the bank's policy decision at 1100 GMT on April 15: 1. WHAT HAS HAPPENED SINCE LAST MONTH'S RATE HIKE? On March 18, the bank under Agbal raised rates by 2 percentage points - more than had been expected - to address inflation that was headed beyond 16%, and to reinforce his hawkish rhetoric. Two days later, early on a Saturday morning, he was