Erdogan sacks governor of Turkey’s central bank
Turkish President Recep Tayyip Erdogan has repeatedly denounced the country’s high interest rates
ANKARA – President Recep Tayyip Erdogan has sacked the governor of Turkey’s central bank and replaced him with his deputy, a presidential decree announced on Saturday, after months of tension with the government over high interest rates.
Murat Cetinkaya, who was appointed to this post in April 2016, was replaced by Murat Uysal, according to the decree published in the Official Gazette, which gave no official reason for the change.
There had been recent speculation that Cetinkaya could be replaced amid disagreements with the government over lowering interest rates.
President Recep Tayyip Erdogan has repeatedly denounced high interest rates and called for their lowering in order to stimulate growth.
Erdogan once called the high rates the “mother and father of all evil”.
Turkey’s main interest rate is 24% after the bank under Cetinkaya aggressively hiked rates by 625 basis points last September following a currency crisis in August.
Last month, Erdogan said high interest rates had hurt Turkey.
“I agree on the independence of the central bank but allow me to say very clearly that I am against interest policies (rates) and above all, high interest rates,” he said. declared.
– ‘Path of the adventurist’ –
The weakening economy contributed to the loss of Ankara and Istanbul by Erdogan’s Justice and Development Party (AKP) in the recent local elections, which was a scathing rebuke to the party in the power after more than a decade and a half in power.
Business columnist Ugur Gurses said the central bank chief was sacked in an attempt to cut rates.
“As I predicted, Ankara is quickly taking the path of adventure after losing the elections,” he wrote on Twitter.
“The purpose of the impeachment of the central bank governor is clear: to print money and lower the interest rate, but the governor can only be sacked for the reasons specified in his law. A presidential decree is not above the law. “
New Governor Uysal has said he will continue to use the tools of monetary policy “independently” while remaining focused on price stability as “the main objective,” according to a central bank statement.
Uysal, who had been deputy governor since June 2016, will hold a press conference in the coming days, the bank said.
The change of head of the central bank came after the markets closed on Friday.
Turkish inflation fell to 15.72% in June from 18.71% in May, official statistics showed Wednesday, the lowest rate in nearly a year.
The opposition Republican People’s Party (CHP) spoke out against Cetinkaya’s withdrawal, with spokesman Faik Oztrak accusing the president of interfering in the independence of the central bank.
“Those who do this have lost the right to say ‘confidence in our economy’. The Turkish central bank is a hostage in the hands of the Palace. Complete shutdown,” he wrote on Twitter.