Turkey sacks central bank governor after interest rate hike

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Istanbul

Turkey fired the governor of its central bank and replaced him with economist and former ruling party lawmaker Sahap Kavcioglu, in a move likely to raise concerns over the bank’s independence.

Former finance minister Naci Agbal, seen as a market-friendly figure, had only been in the position since November, when he was appointed by President Recep Tayyip Erdogan as part of an overhaul of his economic team.

No official reason was given for his sacking, but his dismissal comes after the central bank sharply hiked its main interest rate by a greater-than-expected 200 basis points on Thursday, from 17 to 19 percent.

Erdogan is a strong opponent of high interest rates and once called them “mother and father of all evil”.

Economists blame his unorthodox belief that high interest rates cause inflation instead of slowing it down for many of Turkey’s current economic problems.—Agencies

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