Turkey sacks central bank governor after refusing to resign

Turkey sacks central bank governor after refusing to resign
Murat Cetinkaya, who was appointed to the role in April 2016, had been replaced by Murat Uysal, the decree said.
3 min read
06 July, 2019
Cetinkaya was appointed to the role in April 2016 [Getty]

Turkey has sacked the governor of its central bank and replaced him with his deputy, a presidential decree published in the official gazette said on Saturday.

Murat Cetinkaya, who was appointed to the role in April 2016, had been replaced by Murat Uysal, the decree said, but gave no official reason for the change.

A senior government source who spoke on condition of anonymity said the president “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 Cetinkaya,” the Guardian reported.

“Erdogan remains determined to improve the economy, and for that he made the decision to remove Cetinkaya,” said the official.

“The difference of opinions between the governor and the ministers in charge of the economy has deepened in the recent period,” another government source told Reuters.

There had been recent speculation that Cetinkaya could be replaced amid disagreements with the government on cutting interest rates.

President Recep Tayyip Erdogan, whose son-in-law is the finance and treasury minister, has repeatedly railed against high interest rates and called for them to be lowered in a bid to stimulate growth.

Erdogan once called high rates the "mother and father of all evil".

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

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

Uysal meanwhile said he would continue to use monetary policy tools "independently" while remaining focused on ensuring price stability as his "main aim", according to a central bank statement.

Uysal, who had served as deputy governor since June 2016, will hold a press conference in the coming days, the bank said.

Turkish inflation fell to 15.72 percent in June from 18.71 percent in May, official statistics showed on Wednesday, the lowest rate in nearly a year.

Last year, Turkey’s lira took a drastic fall in value against the US dollar during one of the worst diplomatic rows between NATO allies Washington and Ankara. 

The US hit two Turkish ministers with sanctions over the detention of an American pastor and President Donald Trump doubled steel and aluminium tariffs on Turkey.

The Turkish currency lost nearly a quarter in value against the greenback in August 2019 but Erdogan dismissed economic issues saying Turkey would not seek assistance from the International Monetary Fund

Turkey has “closed the book on the IMF, not be opened again,” Erdogan said in a speech to members of his AK Party in October.

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