Turkey's Erdogan says dismissed central bank governor did not follow instructions

Thu 11 Jul 2019 20:22 GMT | 00:22 Local Time

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Turkish President Tayyip Erdogan said on Wednesday he had dismissed the central bank governor because he failed to follow instructions on interest rates and the bank had not properly fulfilled its role, Reuters reports.

Erdogan sacked Murat Cetinkaya on Saturday, a year before the governor’s four-year term was due to end, replacing him with his deputy Murat Uysal and reigniting concerns about political interference in monetary policy.

“We believed that the person who was not conforming to instructions given on this subject of monetary policy, this mother of all evil called interest rates, needed to be changed,” Erdogan said in a speech in Ankara.

Cetinkaya hiked interest rates by 625 basis points in September to stem a currency crisis and kept them at 24% this year, preventing further losses in Turkey’s lira but helping push the economy into recession.

“You will soon see how our interest rate policy will be formed because interest rates are the mother of inflation,” Erdogan said, adding that the central bank would provide more support to the government’s economic program.

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