Deputy governor leaves Turkey’s central bank

Deputy governor leaves Turkey’s central bank

ANKARA - Reuters
Deputy governor leaves Turkey’s central bank

Turkish Central Bank deputy governor and rate-setter Erkan Kilimci is leaving the bank, three sources familiar with the matter told Reuters on Aug. 30, two weeks before the bank’s monetary policy committee meets to address a slump in the Turkish Lira.

The currency, which hit a fresh low of 7.24 to the United States dollar two weeks ago, weakened on Aug. 30 and touched 6.85. It was trading at 6.745 at 1410 GMT, down more than 4 percent on the day.

Kilimci is joining the board of the Development Bank of Turkey, according to a document the bank released.

The Central Bank was not immediately available for comment.

“Kilimci had no disagreements with the Central Bank administration on any issues—including interest rates. His expertise will be employed at another public position, that’s all,” one senior source told Reuters.

Ratings agency Fitch, which downgraded 24 Turkish banks last month, said on Aug. 30 the 25 percent fall in the lira since then had heightened risks and could lead to further rating cuts. 

The underlying capital positions of the banks will weaken significantly due to the lira’s depreciation and declining asset quality, it said.

“Turkey faces a challenging financing environment given its large current account deficit, high foreign-currency debt and high inflation, exacerbated by deterioration in its economic policymaking credibility and its worsening political relationship with the U.S.,” the ratings agency said.