Turkey purges central bank as nine top officials are sidelined

Pedro Gonçalves
clock
Turkey purges central bank as nine top officials are sidelined

Turkey's central bank, known as Türkiye Cumhuriyet Merkez Bankası (TCMB) has made the biggest overhaul to its senior management in recent years, just weeks after president Recep Tayyip Erdogan sacked its governor.

At least nine senior figures, including the chief economist, Hakan Kara, were told that they were being moved to other roles.

The regulator's head of Research, Banking Department Chief, as well as Risk Management Chief and Institutional Transformation Manager, were also dismissed.

The upheaval follows last month's decision by Erdogan to use a presidential decree to fire Murat Cetinkaya from his role as the bank's governor after a dispute over the pace and depth of interest rate cuts.

Erdogan criticized the bank for not cutting interest rates quickly enough. The bank's new chief, Murat Uysal, cut borrowing costs by 425 basis points in his first meeting and signaled that more cuts would come.

Turkey's president has been a long-time advocate of an unorthodox theory that lowering interest rates will also bring inflation down, going against economic convention that actually the opposite is true.

Erdogan has gained greater control over Turkey's institutions after a switch to a new model of governance concentrated unprecedented powers in his hands. Last year, Last year, he appointed his son-in-law as Treasury and finance minister,

 

Subscribe to International Investment's free, twice-daily, newsletter