Erdogan says Turkey may face problems if central bank not revised

President Tayyip Erdogan said Turkey could face serious problems if its central bank is not completely overhauled after the dismissal of governor Murat Cetinkaya, the Haberturk news website reported on Wednesday.

A presidential decree on Saturday showed Cetinkaya, whose four-year term was due to run until 2020, had been replaced by his deputy Murat Uysal, reigniting concerns about political interference in monetary policy.

Erdogan told reporters on his airplane returning from a trip to Bosnia that Cetinkaya had made decisions for which a high price was paid and he had not inspired confidence or communicated well with the market, Haberturk said.

“The central bank is the most important element in the economy’s financial pillar,” Erdogan said. “If we do not revise it completely, if we don’t put it on solid foundations, we may face living with serious problems.”

“Most importantly, he did not inspire confidence in markets. His communication with markets was not good,” he added.

Erdogan, a frequent critic of high interest rates, has often called for lower rates to kickstart the now recession-hit economy. The lira, which weakened after Saturday’s move, was unchanged at 5.73 against the dollar after Erdogan’s latest comments.