Erdogan leads Turkey’s economy to collapse after sacking central bank governor

Ahmed Sami Abdel Fattah

Turkish President Recep Tayyip Erdogan has sacked Central Bank Governor Murat Cetinkaya and appointed his deputy in his place, raising more question marks about the future of the Turkish economy, which has been falling in the wake of Ankara’s backing terrorist militias in the region.

Cetinkaya is the first governor to be dismissed since 1980, when the military sacked Ismail Hakki Aydogdu.

The Turkish laws stipulate that the central bank’s chief cannot be dismissed unless his health conditions affect his job, or he was indicted in a graft case, or proved he runs a commercial business.

Although the dismissal of Cetinkaya violated the Turkish laws, Erdogan said he had to sack the central bank’s chief for high interest rates. Cetinkaya increased the rates to lure foreign investment inflows.

The Turkish lira weakened 2.5% against the dollar after Cetinkaya’s dismissal.

The Turkish media said that Ali Babacan, Turkey’s former economy minister, resigned his membership of the ruling Justice and Development Party (AKP) over “deep differences” with the party’s direction.  Babacan said he rejected lower interest rates, according to the Turkish media.

The dismissal of the central bank’s governor is a result of wider authorities given to the Turkish president according to the recent constitutional amendments. Erdogan now has absolute executive powers and can issue a decree without referral to parliament.

Researcher Mohamed Hamed, an expert on Turkish affairs, said the sacking of Turkey’s central bank governor as part of Justice and Development Party’s endeavors to control all of the state’s institutions.

“These endeavors will have a negative impact on the Turkish economy as Erdogan’s government undermines the free ​​market economy. That will push investors to pull out the Turkish market, and look for other markets,” Hamed told THE REFERENCE.