Turkey appoints state bank executive as deputy central bank governor

The appointment of Uysal, most recently a deputy chief executive at Halkbank who worked his way up through its treasury department and oversaw its trading operations, was announced in the Official Gazette on June 9.

Financial markets have been watching the central bank closely since its new governor Murat Çetinkaya, a relatively unknown quantity for investors, took over two months ago, with other senior officials also being reshuffled.

The bank has four deputy governors, who are members of the rate-setting monetary policy committee (MPC). The terms of two other members of the seven-person MPC will end by November.

Uysal is expected to work closely with both Çetinkaya and Erkan Kilimci, another new deputy governor appointed in April who had previously been head of markets at the central bank.

Under Çetinkaya, the bank cut the upper band of its interest rate corridor by a total of 100 basis points in April and May, bringing it to 9.5 percent. Analysts expect another cut in the upper band this month.

Turkey’s central bank uses a complex system of multiple rates - known as an interest rate “corridor” - to set policy, which has at times confused financial markets. Çetinkaya has said he wants to simplify the system over time.

The central bank has missed its 5 percent inflation target for the last five years. It estimates year-end inflation at 7.5 percent, while annual inflation in May stood at 6.58 percent.