• Email Us: [email protected]
  • Contact Us: +1 718 874 1545
  • Skip to main content
  • Skip to primary sidebar

Medical Market Report

  • Home
  • All Reports
  • About Us
  • Contact Us

Exclusive-Erdogan is cooling on his latest central bank chief, sources say

October 8, 2021 by David Barret Leave a Comment

October 8, 2021

By Orhan Coskun and Nevzat Devranoglu

ANKARA (Reuters) – Turkish President Tayyip Erdogan is losing confidence in central bank governor Sahap Kavcioglu, less than seven months after he sacked his predecessor, and the two have communicated little in recent weeks, three sources familiar with the matter said.

The sources, who requested anonymity due to the sensitivity of the matter, said Erdogan was frustrated that an interest rate cut was delayed until just last month. It was unclear what Erdogan might do if anything, they said.

The presidential office did not respond to requests for comment on Erdogan’s confidence in Kavcioglu.

The president has abruptly fired three bank governors in the last 2-1/2 years over policy disagreements, roiling the lira and badly harming https://ift.tt/3BteBuo the credibility and predictability of monetary policy.

Analysts said last month’s surprise rate cut was further evidence of political interference given Erdogan, a self-described enemy of interest rates, had long sought stimulus despite high inflation. The lira hit record lows in response.

Erdogan has not publicly addressed the rate cut, and the bank has declined to comment on allegations of political interference in its monetary policy.

The leader of the opposition IYI Party, Meral Aksener, said on Wednesday that Erdogan would probably soon fire Kavcioglu since that fitted the president’s historical pattern of “washing his hands” after bad policy decisions.

The sources, who are close to the presidency, said Erdogan was disappointed that Kavcioglu had been unable to lower inflation in recent months.

“The president’s trust in the central bank governor is damaged,” said one source with knowledge of the matter.

“What was expected of him was a swift rate cut. Instead, the same interest rate was kept for months,” the person added. “There is a serious discomfort over this issue. Erdogan does not meet with Kavcioglu as often anymore.”

The central bank did not comment when asked whether Kavcioglu still had the president’s confidence.

The two other sources confirmed the discord and noted that there would be risks to possibly replacing a fourth central bank chief – including three in the last 12 months alone – given the financial market volatility.

Kavcioglu “does not have a healthy communication with the president anymore,” said a second source. “My concern is whether the president’s own policies will be criticised now rather than that of the central bank governor.”

‘EXPIRATION DATE’

The bank cut its key rate to 18% from 19% last month despite rising price pressure.

Headline inflation hit a 2-1/2 year high of 19.58% in September, while a core measure – which Kavcioglu has been stressing over the last month – was 16.98%.

Analysts say Erdogan’s heavier hand on monetary policy has contributed to a more than 50% drop in the lira in the last three years, a period in which inflation was mostly double digits.

Both have eaten into Turks’ earnings and hit the president’s opinion polls ahead of elections no later than mid-2023.

Erdogan appointed Kavcioglu in March after ousting Naci Agbal, a policy hawk who had hiked rates to 19%. Erdogan ramped up pressure for easing in June when he said publicly that he spoke to Kavcioglu about the need for a rate cut after August.

The first source said that in the past months, Kavcioglu had briefed the president that inflation was expected to drop by August, followed quickly by rates, but he only provided “the best case scenario”. In the end, inflation marched only higher.

Inflation has unexpectedly risen globally this year, driven by post-pandemic supply bottlenecks and rising commodity prices, and catching most central banks off guard.

Aksener, seen as a possible opposition presidential candidate, said Erdogan’s interference with the central bank is a “monstrous system” that depreciated the lira and raised the country’s external debt.

Kavcioglu’s “expiration date is approaching (in) this system that grinds bureaucrats like grinding garbage,” she told party members in parliament on Wednesday.

(Additional reporting and writing by Jonathan Spicer; Editing by Toby Chopra)

Source Link Exclusive-Erdogan is cooling on his latest central bank chief, sources say

David Barret
David Barret

Related posts:

  1. Venice prepares to charge tourists, require booking
  2. Poland condemns jailing of Belarus protest leaders
  3. Verizon sweetens subsidies on iPhones to match competition
  4. SquadPal is a social app to help remote working teams gel

Filed Under: News

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

  • 170 Years On, Thoreau’s Detailed Diaries Have A Lot To Teach Us About The Seasons
  • Obsidian Blades At The Main Aztec Temple Came From Enemy Territory
  • Humans Glow, And It’s A Light That Probably Goes Out When We Die
  • The Gannon Storm: What NASA Learned From The Biggest Geomagnetic Storm In Over 2 Decades
  • Hypersonic Rocket Plane Successfully Performs Second Test, Soaring Past Mach 5
  • A 13-Year-Old Boy Found A “Lost Sea” Beneath The US. It’s So Vast, It Has Never Been Fully Explored
  • Pollution Related To Space Is Getting Worse As Trump And Musk Target Research And Regulations
  • Invasive, Venomous Ants Lived Under The Radar In The US For 90 Years – Now They’re Spreading
  • Updated Prognosis: The Universe May End 10¹⁰²² Years Sooner Than We Thought
  • When You Get Your Fingers Wet They Wrinkle In The Same Pattern Every Time
  • World-First Footage Shows The Devastating Impact Of Trawling As It’s Happening
  • Blue Galdieria Algae Extract Among 3 Natural Food Dyes Newly Approved By FDA
  • Plastic Chemicals May Delay The Internal Body Clock By 17 Minutes, According To Study
  • Widespread Availability Of RSV Vaccine Linked To Fall In Baby Hospitalizations
  • How Often Should You Wash Your Bedding?
  • What’s The Youngest Language In The World?
  • Look Alert: The Most Active Volcano In the Pacific Northwest Is Probably About To Blow, Maybe
  • Should We Be Using Microwaves?
  • What Is The Largest Deer On Earth?
  • World’s First CRISPR-Edited Spider Produces Glowing Red Silk From Its Spinneret
  • Business
  • Health
  • News
  • Science
  • Technology
  • +1 718 874 1545
  • +91 78878 22626
  • [email protected]
Office Address
Prudour Pvt. Ltd. 420 Lexington Avenue Suite 300 New York City, NY 10170.

Powered by Prudour Network

Copyrights © 2025 · Medical Market Report. All Rights Reserved.

Go to mobile version