Murat Uysal is Turkey's new central bank governor

Jeannie Matthews
July 8, 2019

Under Turkey's new executive presidency, which came into effect previous year, Erdogan does not need cabinet approval to change the central bank governor.

Turkey on Saturday fired its central bank governor as policy differences between the government and the bank deepened in the face of an economic slump, volatility in the lira currency and high inflation.

"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.

Turkey's main interest rate is 24% after the bank under Mr. Çetinkaya made an aggressive rate hike of 625 basis points last September following a currency crisis in August.

Uysal's appointment also drew criticism from former central bank officials, who said laws that guarantee the regulator's independence also make it impossible for the executive branch to remove the governor unless he is involved in prohibited activities, such as holding shares in a commercial lender.

Erdogan had informed the Turkish Central Bank under pressure to cut interest rates.

Murat Cetinkaya, who had been serving as the governor since April 2016, was removed from the role a year before his four-year term was due to end in 2020, a presidential decree showed.

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"President Erdogan was unhappy about the interest rate and he expressed his discontent at every chance", a senior government official told the Reuters news agency.

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

The change of central bank chief came after markets closed on Friday.

Turkey's budget deficit skyrocketed up to 225 percent in the first five months of the current year, however, according to Reuters. "The central bank is a captive being kept in the palace", said the main opposition party spokesman Faik Oztrak, referring to Erdogan's office. Full stop, ' he wrote on Twitter.

Turkey has been stockpiling parts for F-16s and other military equipment in anticipation of a US sanction for acquiring the Russian S-400 air defense system.

In 2018, the Turkish economy struggled due to a depreciation of the national currency, the lira, which fell almost 40 percent against the U.S. dollar as relations between Ankara and Washington deteriorated.

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