Erdogan fires central bank chief amid economic crisis

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Ankara, July 6 (IANS) Turkish President Recep Tayyip Erdogan has fired the Central Bank’s Governor without giving an official reason, as policy differences between the government and the bank reportedly deepened in the face of an economic slump.

Murat Cetinkaya, who has held the position since April 2016, was replaced by his deputy Murat Uysal, according to a presidential decree published in the official gazette.

The announcement has prompted renewed concern over the Central Bank’s independence.

The bank has faced pressure in the past from Erdogan to lower interest rates to boost economic growth. He had described the interest rates as the “mother and father of all evil” and claimed that high interest rates cause inflation and that lowering them will improve growth.

But the Central Bank in September instead increased its benchmark interest rate from 17.5 per cent to 24 per cent, saying that doing so would help to battle inflation and boost the lira.

A “tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement”, it said at the time.

In a statement on Saturday, the Central Bank said it will continue to operate independently and that the new Governor will focus on maintaining price stability as its key goal, Anadoulu news agency reported.

“In his first remarks, Murat Uysal, said that the communication channels would be used at the highest level in line with the price and financial stability goals,” the bank said.

“He will hold a press conference within this frame in the coming days,” the statement added.

–IANS

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