CPI FINANCIAL

President Recep Tayyip Erdogan has criticised the bank for not cutting interest rates quickly enough, firing Murat Cetinkaya on 6 July and replacing him with a former deputy.
Türkiye Cumhuriyet Merkez Bankası (TCMB) has made the biggest overhaul to its senior management in recent years, a month after President Erdogan unexpectedly fired the bank’s governor, reported Bloomberg.

At least nine high-ranking officials were removed last week, including Chief Economist Hakan Kara.

The regulator’s Head of Research, Banking Department Chief, as well as Risk Management Chief and Institutional Transformation Manager, were also dismissed.

The dismissals appeared to focus on those former Governor Cetinkaya hired from outside the bank, some had been in post much longer, including Kara, who was described as the backbone of the central bank’s monetary research.

The central bank softened the blow to continuity with some of its new appointments and out of the nine posts, at least five were filled by other central bank veterans. Cagri Sarikaya, who will Head the Research and Monetary Policy Directorate, was the former Deputy Chief of the same department.

Additionally, the banking section will be headed by Ali Cufadar, formerly Head of Operations and Money Markets.

Kara’s position remains vacant with no announced plans for an immediate appointment.

The bank’s new chief, Murat Uysal, cut borrowing costs by 425 basis points in his first meeting and signalled that more cuts would come.

Erdogan has been a long-time advocate of an unorthodox theory that lowering interest rates will also bring inflation down, while economic convention holds that the opposite is true.