Turkish President Erdogan Sacks Country’s Central Bank Chief Over Intransigence On Cutting Interest Rates

Turkish President Recep Tayyip Erdogan has sacked Turkey’s central bank governor Murat Cetinkaya a year before the end of his four-year term, BBC reported.

Though no official reason has been given for firing Murat Cetinkaya, who had held the position since April 2016, it is believed that differences between Turkish government and Cetinkaya over monetary policy deepened in recent months especially over interest rates. The Turkish government wants to lower the rates in a bid to revive the country’s economic growth.

Erdogan, who had recently complained in June that high interest rates were “hurting” the country (he once described the high interest rate regime as the "mother and father of all evil"), announced his decision to sack the governor three weeks before a monetary policy meeting. After resisting the clamour for long, Turkish central bank was expected to begin a cycle of easing.

In September 2018, the central bank increased its benchmark interest rate from 17.5% to 24%, saying that doing so would help to battle inflation and boost the lira. The hefty 6.25 percentage point rise was seen as bank’s latest attempt to stem the currency's implosion. Turkey them was in the middle of a diplomatic row with the Donald Trump led US administration over a jailed evangelical pastor sparking investor concerns about the fragile health of the Turkish economy.

Turkey's currency also hit record lows in the past year, which has the effect of raising the prices for many everyday items.

Cetinkaya will now be replaced by his deputy, Murat Uysal. Uysal, a former banker, held senior positions at the state-owned lender Halkbank and Halk Asset Management, before joining the central bank as deputy governor in 2016.

The abrupt Saturday sacking of the central bank governor has prompted fears over the erosion of central bank's independence and could potentially unnerve international investors

Erdogan has been accused of exercising complete control of independent Turkish institutions.Last July, Erdogan appointed his son-in-law, Berat Albayrak as finance minister.