Fri. Mar 29th, 2024

Istanbul, July 10: Turkish President Recep Tayyip Erdogan has said Ankara could struggle serious obstacles if its central bank does not get fully overhauled, soon after the removal of governor Murat Cetinkaya, according to the Haberturk news websites reports on Wednesday.

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

Turkish central bank governor Murat Cetinkaya, serving since April 2016 as the governor, was ousted from his role and been replaced by deputy governor Murat Uysal, as per a presidential order published on the official gazette.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

According to Reuters news reports, Erdogan told reporters, “The central bank is the most important element in the economy’s financial pillar,” further adding, “If we do not revise it completely, if we don’t put it on solid foundations, we may face living with serious problems.”

“Most importantly, he did not inspire confidence in markets. His communication with markets was not good,” he added.

The lira TRYTOM=D3 which has been weakened after Saturday’s move was unchanged at about 5.73 against the US dollar. According to analysts, the central bank could begin easing its monetary policy at a meeting scheduled on July 25.

Erdogan said he emphasized decisiveness and stability in line with financial issues, adding, Cetinkaya had dismissed the number of monetary policy committee (MPC) meetings every year.

“They did not ask us about these things, they did them of their own accord,” Erdogan said, further adding the ex-governor had made organizational changes to central bank by setting directorates.

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.

 

Also read: Turkey’ President Erdogan ousts central bank governor Cetinkaya amidst economic crisis

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