On Saturday, Turkey fired its governor of the central bank because of the intensification of divergences between the government and the bank in the face of the economic crisis, the volatility of the Lira currency and high inflation.
Murat Cetinkaya, governor since April 2016, was removed from role and replaced by his assistant, Murat Uysal, a presidential decree published on the official gazette showed.
In the past, President Tayyip Erdogan lobbied the central bank to lower interest rates to reactivate an economy that went into recession earlier this year.
“President Erdogan 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,” a senior government official told Reuters
Cetinkaya had raised the benchmark interest rate by 750 basis points last year to support the ailing lira TRYTOM=D3, bringing it to 24% in September, where it has remained unchanged since then.
“The President and the finance minister demanded his resignation, but Murat Cetinkaya reminded of the bank’s independence and declined to resign,” the other source said.
In a statement released on Saturday, the central bank announced that it would continue to operate independently and that the new governor would focus on maintaining price stability as a primary goal.
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