Turkey’s government decided to remove the governor of Turkey’s central bank, replacing the governor with the deputy governor of the bank as per a new presidential decree which was published on official gazette.
Murat Cetinkaya, the governor who has been serving since 2016, was sacked from his position. His role will now be fulfilled by Murat Uysal, his deputy, as per the order. No reason has been given officially, regarding this move.
However, markets have seen speculation that Centinkaya could be fired by his government due to his hesitation for cutting interest rates. President Erdogan had also pressurized Turkey’s central bank previously to cut its interest rates in a bid to boost its economic growth.
2 government sources informed that the governor and the government had seen clashes regarding monetary policy conduct, with differences deepening during the last few months.
A source stated that these difference between ministers who had been at the economy’s helm and the governor began deepening recently. While the minister of finance and President Erdogan had ordered his resignations, Cetinkaya asserted his bank’s independence, refusing to step down from his post.
The bank, on Saturday, stated that it would continue its operations independently. The next governor would concentrate on ensuring price stability and place this as the highest priority.
As per the data which was released a while ago during the last week, Turkey’s current consumer inflation levels have dropped to their lowest since June last year.
This was caused to a fall in the country’s food prices and because of the huge base effect, resulting from last year. This has brought about conditions for enabling the first interest rates reduction of the country, the first since the currency crisis of last year.
Analysts also expect its central bank to enable monetary policies to be eased slowly during a meeting to be held on July 25, if Turkey’s lira does not suffer this month due to US sanctions. The sanctions have been threatened due to the country purchasing Russian-owned defense systems.
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