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Turkey's central bank chief fired as recession hits economy

07 July 2019

Murat Cetinkaya was appointed to the role in April 2016.

In particular, measures including raising taxes on high-income individuals, lowering corporate taxes, and transferring the central bank's 46 billion lira ($8 billion) in legal reserves to the budget.

No official reason was given for the sacking, but markets have speculated over recent weeks that Cetinkaya may be pushed out by the government because of his reluctance to cut rates.

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

But the central bank in September instead increased its benchmark interest rate from 17.5% to 24%, saying that doing so would help to battle inflation and boost the lira.

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A SENIOR GOVERNMENT OFFICIAL, on President Recep Tayyip Erdogan's unhappiness with the head of Turkey's central bank.

The new governor Uysal said he would continue to use monetary policy tools "independently" while remaining focused on ensuring price stability as his "main aim", according to a central bank statement.

Mr Erdogan, whose son-in-law is the Finance and Treasury Minister, has repeatedly criticised the central bank for keeping rates high.

The opposition Republican People's Party spoke out against the removal of Cetinkaya, with spokesman Faik Oztrak accusing the president of interfering in the independence of the central bank.

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"In his first remarks, Murat Uysal, said that the communication channels would be used at the highest level in line with the price and financial stability goals", the bank said.

The lira is down 10% this year after having plummeted 30% last year during the currency crisis.

"Removing the central bank's governor in this manner will deal a big blow to its institutional structure, capacity and independence", Ibrahim Turhan, a former deputy central bank governor, wrote on Twitter.

"Those who removed the central bank governor overnight have lost the right to demand confidence in the country's economy".

"Ironically Uysal's hiring likely makes it more hard for the (central bank) to cut rates as the risk now is that the market reacts badly to this HR change at the central bank".

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Turkey's central bank chief fired as recession hits economy