Turkish President Recep Tayyip Erdogan has removed another official from the central bank in his latest surprising decision this year to restructure the bank's leadership. This move comes two months after Erdogan dismissed the bank's third governor in less than two years, Naci Agbal, a decision that shocked investors and led to a collapse in markets.
According to a decree published in the official gazette on Tuesday, Semih Tumen, a labor economics expert and economics professor at TED University in Ankara, has been appointed as the new deputy governor of the Turkish central bank, replacing Oguzhan Ozbas. Erdogan, who holds unconventional theories regarding monetary policy and its impact on inflation, had previously dismissed deputy governor Murat Cetinkaya in March.
The popularity of Erdogan's ruling Justice and Development Party (AKP) hit a record low last month, according to polls, amidst disappointment with the government's handling of the economy. The decision to dismiss Agbal, who sought to restore the central bank's credibility, resulted in a quick reversal of investor enthusiasm. The lira has lost approximately 14% against the dollar since his dismissal.
Tumen is the third member of the central bank's monetary policy committee that Erdogan has influenced this year, including Governor Sahap Kavcioglu, who lacks experience in monetary policy, and four of the seven policy committee members who have less than a year of experience in their roles. Annual inflation in Turkey is nearing a two-year high, with the lira losing about 14% against the dollar since Agbal's ousting.
