Several mid-tier managers at Turkey’s central bank have been removed, including two general managers and a private secretary to Governor Erdem Başçı, sources said late on Wednesday.
The sources gave no reason for the dismissals, nor did they say who had ordered them. The central bank itself declined to comment. This firing of officials follows on the heels of fears that political pressure is threatening to dent the central bank’s credibility as an independent institution.
Prime Minister Recep Tayyip Erdoğan has frequently accused the bank of doing too little to reduce borrowing costs. However, those dismissed include the general manager in charge of foreign relations and his deputy, as well as the general manager in charge of payment systems, none of whom are directly involved in monetary policy decisions, the sources said. Dozens of executives at bodies including the banking and telecoms regulators and state TV have been fired since the start of the year, in what is seen as part of government efforts to clamp down on the opposition and political dissent. Most of these sacked officials were alleged to be sympathizers of the volunteer-based Islamic Hizmet movement, which Erdoğan has accused of trying to topple his government following a large-scale corruption probe that became public in December.
The corruption inquiry also led to the resignation of three Cabinet ministers and the detention of businessmen close to the government.
“If true, [the central bank dismissals] would be disappointing, and again it would raise questions about the independence of the central bank,” said Timothy Ash, head of emerging markets research at Standard Bank in London. “The hope would be that the CBRT [central bank] is still a meritocracy, irrespective of political beliefs and faith.” Ash said the central bank might opt to announce that the changes are normal procedure and that they have nothing to do with the political pressure being brought to bear on the institution. The central bank, which ramped up rates in January, partly to defend the lira, cut them for the first time in a year last month despite stubborn inflation, weeks after Erdoğan had called for such a move.
Erdoğan later said the bank’s 50 basis point cut in its one-week repo rate, the main rate at which it currently funds the market, had not been enough. The bank’s monetary policy meeting will convene on June 24.