Fri. Mar 29th, 2024

Ankara, July 6: Turkey fired central bank governor on Saturday amid deepening political difference between the bank and the government of President Recep Tayyip Erdogan in the face on heavily falling country’s economy, fickling in the high inflation and lira currency.

According to Reuters news reports, Turkish central bank governor Murat Cetinkaya, serving since April 2016 as the governor, was ousted from his role and been replaced by deputy governor Murat Uysal, as per a presidential order published on the official gazette.

However, there were no official reasons for the move but, markets have formed a theory in recent weeks that the governor may be ousted because of his unwillingness regarding cut rates.

The central bank has in the past face pressured from Erdogan to decrease interest rates in order to restart a falling economy causing a recession.

For the second consecutive quarter earlier this year, the nation’s economy fell sharply as an arduous currency crisis, as well as soaring inflation and hike in interest rates that took a weighted toll over all outputs.

“The difference of opinions between the governor and the ministers in charge of the economy has deepened in the recent period,” said one of the sources.

Cetinkaya has increased the benchmark interest rate by 625 basis point in 2018 in order to back the ailing lira, pushing it to 24% by September, after which it has been left unchanged.

Erdogan reiterated his condemnation to the central bank for pushing the interest rates high.

“The President and the finance minister demanded his resignation, but Cetinkaya reminded of the bank’s independence and declined to resign,” the other source said.

In an official statement, the central bank stated it will still continue to operate independently and the successor of Cetnikaya will have an aim of maintaining rates stability.

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

“He will hold a press conference within this frame in the coming days,” the statement added.

However, the Erdogan-led government was not available to immediately deliver a response.

 

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