PM picks deputy governor Çetinkaya as Turkey’s next Central Bank chief: Officials

ANKARA/ŞANLIURFA

The Turkish government has chosen Murat Çetinkaya, a deputy Central Bank governor, to be the Bank’s new governor, Deputy Prime Minister Numan Kurtulmuş announced on April 11 after a cabinet meeting led by Prime Minister Ahmet Davutoğlu in Şanlıurfa on April 11.

The term of current Governor Erdem Başçı was due to expire on April 19 and uncertainty over whether he will be reappointed or whether someone else will be named in his place has unsettled financial markets.

Before the announcement, a government official and an economy official both told Reuters that Davutoğlu’s decision had been discussed with President Recep Tayyip Erdoğan Erdoğan and Çetinkaya’s name was circulated for approval at a cabinet meeting later yesterday. 

Turkish Deputy Prime Minister Mehmet Şimşek also said in Şanlıurfa that the new Central Bank governor would be from within the Bank and would be identified “today or tomorrow,” Anadolu Agency had reported earlier on April 11.  

“We have come to the final stage in naming the new Central Bank governor. Last week we discussed the issue with our prime minister and then our PM with our president [Erdoğan]. The new Central Bank governor will be named today or tomorrow and will be from the bank,” Şimşek had said ahead of the signature of the related decree. 

Following the cabinet’s approval, the decree will be presented to Erdoğan’s approval.

Both optimistic and cautious reactions voiced  Çetinkaya has been a deputy governor since June 2012. He has a background in Islamic banking, beginning his career at Albaraka Türk and working as a deputy director at Islamic lender Kuveyt Türk in his last private sector position before joining the Central Bank.

“Compromise candidate, so good that the presidency and government are working together on this ... A battle over the nomination would have been very market negative,” Timothy Ash, strategist at Nomura, wrote in a note, as quoted by Reuters. 

The Turkish Lira firmed slightly to 2.8261 against the dollar as news of Çetinkaya’s expected nomination emerged. Turkey’s 10-year benchmark bond yield fell to a five-month low below 9.8 percent.

But economists cautioned that his monetary policy stance was not well known and that, beyond the initial relief at the end to uncertainty, he would need to win the confidence of the market. He will chair his first policy meeting on April 20.

“I have doubts about whether Çetinkaya can fill Başçı’s shoes either academically or in terms of expertise. His stance on monetary policy will be decisive from now on,” said Haluk Bürümcekçi of Istanbul-based Bürümcekçi Consulting, as quoted by Reuters. 

The Bank’s monetary policy, mainly its interest rate policy, has been criticized by several circles close to Erdoğan.