This move shook the market two months after the president fired the governor and deputy governor of the central bank.
Two months after President Recep Tayyip Erdogan fired the central bank governor, Turkey deposed one of four central bank deputy governors on Tuesday.
According to an overnight order issued in the official gazette, Oguzhan Ozbas was removed from office and Siemi Tumen was appointed to replace him.
Tumen currently serves as an advisor to Erdogan and is the chair of the Economics Department of TED University in Ankara. From 2002 to 2018, he held various positions in the Central Bank of Turkey.
In March of this year, Erdogan fired Naci Agbal, the governor of the central bank, two days after raising interest rates sharply to prevent inflation. He was led by former ruling party lawmakers and critics of tightening monetary policy. The person replaced him. The move triggered a plunge in the Turkish lira.
Later that month, Erdogan, who held unconventional theories about monetary policy and its impact on inflation, also took over as Deputy Governor Murat Cetinkaya.
Four of the seven members of the Turkish Interest Rate Setting Committee currently have less than one year of work experience, including the new governor Sahap Kavcioglu (Sahap Kavcioglu).
The decision to fire Agbar, who tried to restore the credibility of the central bank, triggered a rapid reversal of investor enthusiasm. After taking office, the new governor has pledged to maintain policy continuity and maintain interest rates unchanged in the second month of May.
Low public support
Nevertheless, since Agbar’s removal, the annual inflation rate has approached its highest level in two years, and the exchange rate of the lira against the dollar has fallen by about 14%. Well-known pollsters said that public support for Erdogan’s AK party hit a record low last month because the government is not satisfied with the way the economy has handled it.
The recently deposed Lieutenant Governor Ozbas was appointed in July 2019, when Erdogan’s female Ber Berat (Alatraky) served as Minister of Finance and Treasury, overseeing the economy.
In November last year, after assuming the post of deputy governor, he criticized the central bank policy under the leadership of former governor Murat Uysal. He said that by the end of last year, the tightening of backdoor policies “unnecessarily made the currency Complicated positions”.
At 0206 GMT, the exchange rate of the lira to the US dollar is 8.39.