Erdogan fires deputy governor of Turkey’s central bank

Turkey’s president has sacked one of the deputy governors of the country’s central bank, the third senior official to be fired in two months in a series of interventions at the nominally independent institution that have unnerved investors.

Recep Tayyip Erdogan issued a decree in the Official Gazette in the early hours of Tuesday dismissing Oguzhan Ozbas, a member of the monetary policy committee, and replacing him with Semih Tumen, a professor of economics at TED University in Ankara.

In March, Erdogan fired Naci Agbal, the third central bank governor in less than two years. Agbal was replaced by Sahap Kavcioglu, a newspaper columnist who shares Erdogan’s unconventional view that high interest rates drive, rather than quell, inflation. A week later, Erdogan replaced deputy governor Murat Cetinkaya.

The lira has lost 14 per cent of its value against the dollar since March amid fears the bank under Kavcioglu will be unable to defy Erdogan to keep monetary policy tight to fight inflation, which has been stuck in double digits for much of the past three years.

Erdogan has said both interest rates and inflation will be below 10 per cent this year. He has long badgered the central bank to suppress borrowing rates to stimulate the economy.

The central bank holds its next rate-setting meeting on June 17. Kavcioglu has pledged to keep policy tight until inflation slows but has removed some of his predecessor’s hawkish language from policy statements.

Tumen, 44, has graduate degrees from the London School of Economics and the University of Chicago. He previously worked at the central bank in various roles and as a human resources adviser to Erdogan.

Just three of the seven members of the monetary policy committee have served as policymakers for three or more years, with the rest appointed since the start of 2020.

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