Central bank chief removed from post

ANKARA- Anadolu Agency

The governor of Turkish Central Bank has been relieved from duty with a presidential decree.

Murat Çetinkaya, whose four-year term was due to run until 2020, will be replaced by his deputy Murat Uysal, a presidential decree published early on July 6 in the Official Gazette showed.

No official reason was given for the sacking.

“President [Recep Tayyip] Erdoğan was unhappy about the interest rate and he expressed his discontent at every chance. The bank’s decision in June to keep rates constant added to the problem with Çetinkaya,” a senior government official told Reuters, speaking on condition of anonymity.

“Erdoğan remains determined to improve the economy, and for that he made the decision to remove Çetinkaya,” the official added.

Two other government sources told Reuters disagreement between the government and the governor over monetary policy has intensified in the past few months.

Çetinkaya hiked the benchmark interest rate by a total of 11.25 percentage points last year to support the lira, pushing it to the current 24 percent.

Erdoğan repeatedly criticized the central bank for keeping rates high.

In a statement on July 6, the central bank said it will continue to operate independently and that the new governor will make maintaining price stability the key goal.

“In his first remarks, Murat Uysal, said the communication channels would be used at the highest level in line with the price and financial stability goals,” the bank said, adding that Uysal would hold a news conference in the coming days.

Data last week showed Turkey’s consumer inflation slowed to its lowest level in a year in June, potentially paving the way for the country’s first interest rate cut since last year’s currency crisis.

Annual inflation hit a 15-year high in October above 25 percent, but later dipped and is currently running just over 15.5 percent.

The main opposition party criticized the move, pointing to concerns that the move could undermine the bank’s credibility.

“Those who removed the central bank governor overnight have lost the right to demand confidence in the country’s economy. The central bank is a captive being kept in the palace,” said the main opposition party spokesman Faik Öztrak, referring to Erdoğan’s office.