Deputy PM Şimşek turned into ‘punching bag’ - former Central Bank governor

The former Governor of Turkey’s Central Bank Durmuş Yılmaz on Saturday said that Deputy Prime Minister and the most senior minister in charge of the country's economy Mehmet Şimsek has been turned into ‘’a punching bag,’’ under the leading Justice and Development Party (AKP) administration,  Turkey’s Sözcü daily reported.

Yılmaz comments coincide with Turkey’s struggle to recover from last week’s sudden drop in the value of the lira, apparently triggered by a speech by Turkish President Recep Tayyip Erdoğan to investors in London in which he said he would force the central bank to lower interest rates. On Wednesday, following an emergency meeting due to the plunging lira, Turkey’s Central Bank finally delivered a rate hike to the tune of 300 basis points, increased its lending rate for the late liquidity window to 16.5 percent from 13.5 percent.

The former Central Bank governor pointed to lack of coordination in the country’s financial administration, noting, ‘’The president is trying to ensure this coordination by himself. But neither his acquired knowledge, nor his energy is sufficient for this. The Turkish economy is experiencing serious wielding.’’

Yılmaz went on to criticize the AKP administration, saying, ‘’Over the past 16 years, they have announced 16 fiscal packages and they didn’t give an account for a single one of them. But in 2002, they would give an account to the IMF every three months. Everything was on a calendar.’’

The former Central Bank governor spoke to the state of the bank, saying that government should support the discourse, actions and fiscal policies of the Central Bank -- all of which has not been done by Turkey’s leading AKP, whose leader Erdoğan has kept a firm grip over the bank’s decision-making.

Şimşek however, who was not re-selected as a parliamentary candidate for the ruling AKP, in a statement last week said the Central bank was independent and free to respond to any speculative attacks.