Turkish president may have ulterior motive in slamming Central Bank, says industry representative

Aysel Alp ANKARA

President Recep Tayyip Erdoğan and Central Bank Governor Erdem Başçı presenting the new symbol for the Turkish Lira.

The top representative of Ankara industrialists has taken a different approach on the ongoing debate over central bank independence and suggested the Turkish president might have ulterior motives for publicly criticizing the Central Bank governor.

Ankara Chamber of Industry (ASO) Chairman Nurettin Özdebir argued President Recep Tayyip Erdoğan might be intending to fuel the weakening of the Turkish Lira when he criticizes Central Bank Gov. Erdem Başçı for not reducing interest rates enough.

“I cannot find the answer for that: the governor of the Central Bank is a public officer tasked by law. The president of this country doesn’t need the public to send a message to the governor,” Özdebir told daily Hürriyet.

“This means there is something else happening. Maybe he wants the currency rates to rise in this way. Maybe there is a need for creating such an uncertainty. Maybe it is needed to discipline the economy and easing exports,” he said.

“Otherwise he [Erdoğan] would tell Başçı ‘come here,’ wouldn’t he? Is there a need to send messages to a public officer through you [the media]?” he said, further speculating Erdoğan’s public criticisms may be intended to make the Central Bank a scapegoat.

Erdoğan and his allies have lambasted Başçı over the past weeks for failing to radically lower interest rates to stimulate faltering growth.

Özdebir also said Turkey has been suffering from falling investments over the past three years, but he asserted the ongoing interest rate tension adds to the investors’ headaches, further hurting the country’s economic performance.

“Turkey’s growth performance has deteriorated due to created tensions. The foreign exchange entrance into Turkey also declined. We need to revitalize the growth,” the ASO head said.

“We all talk. The Central Bank’s job is getting harder as we talk. We live in a tough region and markets are very shallow, leading them to be manipulated easily,” he added.