Erdoğan may have fired central bank chief for helping rival Babacan – columnist

Turkish President Recep Tayyip Erdoğan may have finally decided to fire the chief of the country’s central bank for giving information to a new political rival, columnist Murat Yetkin said.

There is talk in Ankara that Erdoğan didn’t sack Murat Çetinkaya at the weekend for failing to lower interest rates over recent months, as was widely thought, Yetkin said in his personal blog on Wednesday. Rather, Erdoğan may have taken the controversial step because of a report presented at the G-20 meetings in Japan late last month, prepared with the contribution of Turkey’s former economy chief Ali Babacan, he said.

The suspicion is that Çetinkaya provided economic and financial information to Babacan to compile his part of the document. That would explain why Erdoğan, on sacking Çetinkaya, said this week he had to pay a heavy price for past mistakes, said Yetkin, who is the former editor-in-chief of Turkish English language newspaper Hürriyet Daily News.

Babacan is setting up a political party in Turkey to rival Erdoğan’s governing Justice and Development Party (AKP). Erdoğan has been visibly angered by Babacan’s decision this month to resign as a founding member of the AKP to establish the group. It comes during a severe economic downturn that was partly to blame for the AKP losing the mayorships of Istanbul and Ankara in local elections that ended last month.

Erdoğan was accompanied to the G-20 held on June 8-9 by Treasury and Finance Minister Berat Albayrak – Çetinkaya stayed in Ankara, allegedly because he had to chair a meeting of the monetary policy committee on June 11. The president was angered when he learnt of the high-profile report on global financial developments with Babacan’s signature on it, Yetkin said.

In explaining his decision to fire Çetinkaya, Erdoğan also pointed to his failure to meet government requests to lower interest rates. The central bank has kept the benchmark lending rate on hold at 24 percent since September, when it hiked it by 625 basis points to prevent a slump in the lira from turning into a full-blown financial crisis.

Erdoğan has appointed Murat Uysal, formerly a deputy governor at the central bank, as the new governor.