President Erdogan dismisses Central Bank (CBRT) governor Murat Uysal at night

Central bank (CBRT) President Murat Uysal was dismissed by the decision of the President published in the Official Gazette at night and replaced by former Finance Minister Naci Agbal. Financial Times used the headline “Erdogan dismissed the head of the central bank after a large depreciation of the TL”.

Recalling that the depreciation of TL against the dollar this year exceeded 30 percent, the newspaper said that UYSAL’s normal tenure was 4 years, but he was dismissed in 16 months with no reason for the decision, disclosed.

The paper also said following: “Erdogan insistently required UYSAL to keep interest rates low despite double-digit inflation, to stimulate economic growth. Uysal was criticized by investors for keeping said rates low despite depreciation of TL interpreting this practice as a compromise given to Erdogan.

In fact in Uysal’s period policy interest rates were reduced from 24 percent to 8.5 per cent and followed by a sharp fall in the Turkish lira in 2020 September an increase of 200 basis points in interest rates was introduced.

The FT recalled that Uysal’s predecessor Murat Çetinkaya was also fired by the President’s decision in July 2019 on the grounds that he did not reduce interest rates and said: “The recent dismissal decision will likely increase concerns about Erdogan’s intervention in monetary policy to be normally decided by an independent central bank.”