Erdogan Fires Another Central Bank Deputy Governor

Turkey’s President Recep Tayyip Erdogan has ousted another central bank official, the latest of his sudden decisions this year to restructure leadership of the institution. The move comes two months after Erdogan fired Naci Agbal, the bank’s third governor in less than two years, a surprise that shocked investors and sent its markets into a nosedive.

In the latest reshuffle, Semih Tumen, a labor economist and professor of economics at Ankara-based TED University, was named deputy governor early Tuesday, replacing Oguzhan Ozbas, according to a decree published in the Official Gazette. Erdogan, who holds unorthodox theories about monetary policy and its impact on inflation, also replaced deputy governor Murat Cetinkaya in March.

Four of seven members of Turkey’s rate-setting committee now have less than a year of experience at their jobs, including new Governor Sahap Kavcioglu. The decision to fire Agbal, who had sought to restore the central bank’s credibility, set off a swift reversal of investor enthusiasm. The new governor has pledged policy continuity after his appointment and kept interest rates unchanged for a second month in May.

Still, annual inflation is near a two-year high and the lira has lost about 14% against the dollar since Agbal was ousted. Public support for Erdogan’s ruling AK Party meanwhile hit a record low last month, according to prominent pollsters, amid disenchantment with the government’s handling of the economy.

Turkey’s Erdogan Fires Another Central Bank Deputy Governor, Bloomberg, May 25