What Happened: Turkish President Recep Tayyip Erdogan has fired the governor of the central bank, BBC reported July 6. No official reason was given why Erdogan dismissed Murat Cetinkaya, who had held the position since April 2016, and replaced him with his deputy, Murat Uysal.
Why It Matters: Cetinkaya's firing will renew concerns over the central bank's independence. Erdogan believes lowering interest rates will increase economic growth, but the central bank last year instead raised its benchmark interest rate from 17.5 percent to 24 percent, arguing that the hike was necessary to fight inflation and boost the lira.
Background: A modest recovery in the lira's value so far in 2019 failed to protect Erdogan's ruling party from major losses in this year's local elections, including mayoral defeats in Istanbul and Ankara. Turkey's inflation rate has also fallen recently, which may allow the central bank to consider cutting interest rates.
Read More:
- Istanbul's Voters Deal Erdogan a Major Blow (June 24, 2019)
- The AKP's Thirst for Power Risks Leaving Turkey High and Dry (June 11, 2019)
- Turkey: A Rerun of the Istanbul Mayoral Election Raises Economic Risk (May 7, 2019)
