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Large Overhaul to Senior Managers in Turkey’s Central Bank after Governor Sacked

Large Overhaul to Senior Managers in Turkey’s Central Bank after Governor Sacked

Saturday, 10 August, 2019 - 08:30
FILE PHOTO: Turkey's Central Bank headquarters is seen in Ankara, Turkey in this January 24, 2014 file photo. REUTERS/Umit Bektas/Files/File Photo
Ankara - Saeed Abdelrazek

Turkey’s central bank made the biggest overhaul to its senior management in recent years, a month after President Recep Tayyip Erdogan unexpectedly fired the bank’s governor, Murat Cetinkaya, replacing him with Murat Uysal.

At least nine high-ranking officials were removed on Thursday, including chief economist Hakan Kara, according to two officials with direct knowledge of the matter, who asked not to be named and cited an internal announcement.

The bank’s head of research, banking department chief, risk management chief and institutional transformation manager were also dismissed, the people told Bloomberg.

The dismissals appeared to focus on those Cetinkaya hired from outside the bank, though no official reason was given, they said. Some had been in post much longer, though, including Kara, who was described as “the backbone” of the central bank’s monetary research by Tim Ash, a strategist at BlueBay Asset Management in London.

Erdogan has criticized the bank for not cutting interest rates quickly enough, firing Cetinkaya on July 6 and replacing him with his former deputy.

Banking sources expected the overhaul to continue mainly after the Turkish Statistical Institute (TurkStat) reported this week that the country saw a 16.65 percent annual hike in consumer prices last month compared to 15.72 percent in June.

On a monthly basis, the consumer prices went up 1.36 percent in July, it said.

Turkey’s central bank sharply cut its key interest rate by a more than expected 425 basis points to 19.75 percent end of July to spur a recession-hit economy, its first step away from the emergency stance it adopted during last year’s currency crisis.

The spokesman of the opposition Republican People's Party, Faik Oztrak, said the central bank has lost its authority after Erodgan put it under his control.

The bank’s decision to sharply cut its key interest rate confirmed that the bank has lot its independence, said Oztrak.

“The entire world is now saying that the central bank is no longer independent,” he said.

“They have the right to say so after Erdogan sacked the bank’s former governor for refusing to give consent to his demands, and replaced him with someone who meets his requests,” Oztrak added.

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