Erdogan says Turkish central bank director has declined to deny price reductions
Govt sources claimed Erdogan's frustration that the bank has kept the reference price of 24%
Public sources claimed Erdogan's frustration that the bank has kept its reference rate at 24%. PHOTO: REUTERS / FILE
ANKARA: Turkish President Tayyip Erdogan dismissed the central bank director to deny the government's repeated demands for price reductions, Hurriyet Sunday newspaper quoted Erdogan as telling a meeting with his party lawmakers.
Governor Murat Cetinkaya, whose four-year term would run until 2020, was replaced by his deputy Murat Uysal, a presidential decree published early Saturday in the official street show.
"We told him several times in finance meetings that he was going to cut prices. We told him that the rate would help inflation fall. He didn't do what was necessary," Erdogan said.
The Daily Hurriyet said that Erdogan gave his explanation of having beaten Cetinkaya, almost a year before his term was at the end, during a consultation meeting in Istanbul with the members of his reigning AK party.
"We were not on the same side,"
No official reason was given for sacking, but public sources argued Erdogan's frustration that the Bank has kept the reference price of 24% since September last year to support the long-term lira currency.
In a written statement on Saturday, Uysal that he will independently implement monetary policy instruments focused on achieving and maintaining the primary objective of price stability
Despite the new governor's assurances, critics say to move The loan again showed that Erdogan was in full control of monetary policy, and that Turkey would experience a period of rapid cuts.
"T he sacking of the governor of the CBRT at the presidential decree shows that Erdogan is in charge of monetary policy," said Wolfango Piccoli, of the London based political risk consultant Teneo.
"The decision significantly undermines what credibility the CBRT had left. It also signals that the overall institutional degradation continues unabated, "he added.
During Turkey's new chairmanship, which came into force last year, Erdogan does not need cabinet approval to change the central bank governor.
An older Turkish economist also said that Erdogan's surprise rejection of Cetinkaya could further undermine the perception of the bank's independence.
"While the debate on the central bank's independence continues, Cetinkaya, who apparently opposed any action, will replace him with an unusual method, just burn this debate," the senior economist Reuters .
"We want to see how he can convince the markets for a price reduction at a time when independence is becoming increasingly questionable. "
The central bank has kept its benchmark rate unchanged since it increased its share price by 625 basis points to 24% in September to prevent a full-blown financial crisis.
Severa l economists are already expecting a supplement to a July 25 monetary meeting meeting as inflation fell to 1[ads1]5 , 7% in June, the lowest level in one year.
"Newspapers have quoted Erdogan saying that Cetinkaya did not do what he was told at prices. It creates a shadow on Uysal, but he will be quite aggressive on price reductions, says another Turkish economist at Reuters.
