Turkish President Recep Tayyip Erdoğan. Picture: REUTERS
Turkish President Recep Tayyip Erdoğan. Picture: REUTERS

Istanbul — Turkey’s President Recep Tayyip Erdogan has ousted another central bank official, the latest of his sudden decisions this year to restructure leadership of the institution.

The move comes two months after Erdogan fired Naci Agbal, the bank’s third governor in less than two years, a surprise that shocked investors and sent its markets into a nosedive.

In the latest reshuffle, Semih Tumen, a labour economist and professor of economics at Ankara-based TED University, was named deputy governor early on Tuesday, replacing Oguzhan Ozbas, according to a decree published in the Official Gazette. Erdogan, who holds unorthodox theories about monetary policy and its impact on inflation, also replaced deputy governor Murat Cetinkaya in March.

Four of seven members of Turkey’s rate-setting committee now have less than a year of experience at their jobs, including new governor Sahap Kavcioglu.

The decision to fire Agbal, who had sought to restore the central bank’s credibility, set off a swift reversal of investor enthusiasm. The new governor has pledged policy continuity after his appointment and kept interest rates unchanged for a second month in May.

Still, annual inflation is near a two-year high and the lira has lost about 14% against the dollar since Agbal was ousted. Public support for Erdogan’s ruling AK Party meanwhile hit a record low last month, according to pollsters, amid disenchantment with the government’s handling of the economy.

Tumen has previously worked in different roles at the central bank for 16 years until 2018, leaving the monetary authority after serving as a director-general in charge of the structural economic research department. Since then, he has been an adviser at the Turkish presidency’s human resources office.

Ozbas, the most recently ousted deputy governor, was appointed in July 2019, when Berat Albayrak, Erdogan’s son-in-law, was overseeing the economy as treasury and finance minister.

Last November, he criticised the central bank policies under former governor Murat Uysal after working as his deputy, saying backdoor policy tightening towards the end of last year was “unnecessarily complicating the monetary stance”.

Bloomberg News. More stories like this are available on bloomberg.com

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