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Erdogan Fires Central Bank Governor

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Following rate tension that hit Turkey, President Recep Tayyip Erdogan has sacked the governor of Turkey’s central bank and replaced him with his deputy. His sack came after months of tension with the government over high-interest rates. Murat Cetinkaya, who was appointed to the role in April 2016, has been replaced by Murat Uysal, according to a presidential decree published in the official gazette of the country.

 

Erdogan has repeatedly railed against high-interest rates and called for them to be lowered to stimulate growth.

He once called high rates the “mother and father of all evil”.

Turkey’s main interest rate is 24 per cent after the bank under Cetinkaya made an aggressive rate hike of 625 basis points last September following a currency crisis in August.

It would be recalled that last month, Erdogan said the current rate was “unacceptable”, promising to find a solution as soon as possible.

“I agree on the independence of the central bank but let me put it very clear that I am against interest (rate) policies and above all, high-interest rates,” he said.

Although, the reaction has trailed the sack as it was gathered that Erdogan’s ruling Justice and Development Party (AKP) has built its success on Turkey’s strong growth, with supporters boasting of progress in living standards during the Turkish leader’s 16 years in the office first as prime minister and then president.

But the weakening economy contributed to the AKP losing Ankara and Istanbul in recent local elections, in what was a stinging rebuke to the ruling party in power since 2002.

Reacting, economic columnist Ugur Gurses said that the central bank chief was sacked with the goal of lowering rates.

“As I predicted, Ankara is swiftly taking an adventurist path after losing the election,” he wrote on Twitter.

“The goal of removing the central bank governor is clear: print money and lower the interest (rate) but the governor cannot be sacked except for the reasons specified in its law.

A presidential decree is not above law.”

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