Turkey may hire former state-run broker CEO as central bank deputy chief

Turkey may appoint a former chief executive of state-run broker Halk Yatırım as deputy governor of the central bank.

Murat Çetinkaya, who has the same name as the central bank governor ousted by President Recep Tayyip Erdoğan last month, is currently being considered for the position, Reuters reported on Thursday citing three people with knowledge of the matter.

Çetinkaya left state-run Halk Yatırım in June 2017 to become CEO of Borsa Istanbul, the country’s main stock exchange.

Erdoğan fired Çetinkaya’s namesake last month for failing to lower interest rates. He replaced him with deputy governor Murat Uysal, leaving a vacant position. Çetinkaya is now likely to fill it, Reuters said.

Erdoğan gave himself the power to hire and fire the governor and deputy governors of the central bank last summer, after he assumed increased presidential powers at an election. Some investors and analysts now say the bank has lost its political independence, which was guaranteed under an International Monetary Fund loan programme almost two decades ago.   

A second vacant deputy governor position will also be filled soon, Reuters said.

Çetinkaya, born in Ankara in 1970, began his career at state-run Ziraat Bank’s fund management department, according to Borsa Istanbul's website. He was appointed CEO of Halk Yatırım in 2010 and remained a board member until June 2017. He was also deputy chairman of leading business group, the Union of Chambers and Commodity Exchanges of Turkey (TOBB).

The central bank cut interest rates by 425 basis points to 19.75 percent in July in the first meeting of its Monetary Policy Committee since Uysal assumed office. The bank had kept rates on hold since October to rein in inflation and defend the lira. Erdoğan has called for more rate cuts at the next MPC meeting in September.  

As CEO of Borsa Istanbul, Çetinkaya oversaw the introduction of the Turkish lira swap market and has sought to introduce new means to hedge the lira.

The swaps market has become a focus of controversy in Turkey after its state-run banks reportedly used the market to defend the lira and the central bank increased the proportion of swaps in its foreign currency reserves.