The Turkish President used his executive powers to dismiss the central bank governor over the weekend, potentially undermining the regulator’s independence just weeks before it’s scheduled to decide on policy.
Monday 08, July 2019
The lira slumped more than three per cent after President Recep Tayyip Erdogan’s shock decision to replace the country’s central bank governor fueled concern the regulator will lower borrowing costs by more than expected, reported Bloomberg.
Deputy Governor Murat Uysal was named as a replacement.
Murat Cetinkaya, appointed governor in April 2016, was criticised for acting too slowly to tighten monetary policy during a currency rout in August. He then showed resolve in the face of market turmoil, increasing the benchmark interest rate by 625 basis points in September and holding it ever since.
Win Thin, Global Head of Currency Strategy at Brown Brothers Harriman, said, “Deputy Governor Murat Uysal was named as the replacement, though we all know who really controls monetary policy now.”