Erdogan fires second bank governor in 18 months

Turkish President Recep Tayyip Erdogan has fired the central bank governor and appointed a former finance minister to the post.

Murat Uysal was dismissed amid a freefall of the Turkish lira, which has lost more than 30 percent of its value against the dollar. One dollar is currently worth 8.54 lira.

It is the second time in 18 months that Erdogan has fired a central bank governor. Uysal’s predecessor, Murat Cetinkaya, was sacked by presidential decree in July 2019. The latest dismissal is likely to undermine perceptions about the bank’s independence in monetary policies that fail to shore up investor confidence if new governor Naci Agbal does not address market expectations.

Uysal faced harsh criticism from the markets for not raising interest

rates, but Erdogan is known to believe that low rates stimulate economic growth.

Agbal, who has been head of the presidential budget office since 2018, was Erdogan’s finance minister between 2015 and 2018, and is a respected technocrat.

“He is well known by investors and markets,” Timothy Ash, an emerging markets strategist at Bluebay Asset Management in London, told Arab News. “The question is whether he will be allowed to do the job as he sees fit.” Raising interest rates does not appear to be on the government agenda for now, and Finance Minister Berat Albayrak has ruled out an intervention to support the lira. “The Turkish Central Bank’s credibility is now so badly undermined that it is not just about changing the governor. They need to revamp the entire board,” said Ash.