Governor of Turkish Central Bank defends dismissal of predecessor

The new governor of the Turkish central bank has defended President Recep Tayyip Erdogan, sacked by his predecessor, while insisting that the bank retain control of the setting of rates.

During his first press conference since taking office in early July, Murat Uysal said that the dismissal of his former governor, Murat Cetinkaya, had been "in accordance with the legislation in force", rejecting the experts' claims. legal and former officials of the central bank. the shooting was illegal.

The Turkish president, who is fiercely opposed to high interest rates, said that Cetinkaya had been sacked because he "would not follow the instructions".

Uysal, who cut the bank's key rate by 4.25% last week, insisted that the institution maintain its independence, while making a distinction between "independence in the field of instruments and objectives. "

"The central bank does not determine inflation alone," he said. "According to the legal framework, the inflation target is determined with the government. But we are independent about the tools we can use to achieve this goal. "

He added: "When we organize the meetings of our monetary policy committee, we decide independently. That's what we did at the last meeting. "

Uysal announced further rate cuts over the coming months, saying the data indicated "considerable room for maneuver in monetary policy" by revising the bank's inflation forecast to 13.9 percent. at the end of the year, compared with 14.6% previously.

He added: "There is a lot of room for maneuver, but how to use this room, its dimensions, its timing, will depend on all dimensions of price stability. . . I can not give you more details at this point. "

Mr Uysal said the bank would give priority to guaranteeing a real interest rate for investors when setting rates. Without specifying the premium he would offer, he said "one of the key variables" would be comparable real interest rates in countries such as Brazil, South Africa and South Korea.

Uysal spoke for more than an hour with reporters and investors at Wednesday's quarterly inflation meeting. The new governor said he wants to strengthen the bank's communications, adding, "We will share our policies much more openly with the public."