Erdem Ba

As I noted in my last column, almost all Turkey economists were expecting the Central Bank to cut its policy and borrowing rates at the Monetary Policy Committee rate-setting meeting on Feb. 24.

Main opposition Republican People?s Party (CHP) leader Kemal K?l?çdaro?lu has criticized President Recep Tayyip Erdo?an for interfering in every aspect of the government?s work and for ?talking too much.?

President Recep Tayyip Erdo?an?s continued harsh criticisms of the Central Bank have raised concerns about the future of its governor, Erdem Ba?ç?, as well as Deputy Prime Minister Ali Babacan, both of whom are widely respected among global market players. Speculations about the possible resignation of both Ba?ç?

The timing of a lengthy meeting between Prime Minister Ahmet Davuto?lu and Deputy Prime Minister Ali Babacan late Feb. 25 has led to speculation suggesting Babacan resigned from his post after President Recep Tayyip Erdo?an continued his criticism of the Central Bank.

Yet, Energy Minister Taner Y?ld?z ruled out such move.

Judging by the expectations of economists surveyed by business channel CNBC-e, rate cuts are a given at the Central Bank of Turkey?s Monetary Policy Committee (MPC) rate-setting meeting on Feb. 24.

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.

Central Bank Governor Erdem Ba?ç?, who has recently been criticized by many political figures for not cutting the Bank's rates, moved on Feb. 7 from his public lodgings, in which he had lived for the past four years. Ba?ç? was claimed to have moved to another house, which is close to his children's school.

Turkish Central Bank, under pressure from President Recep Tayyip Erdo?an to aggressively lower rates, on Feb. 3 rejected the option of an unscheduled rate cut as inflation slowed less than expected.
     
Erdo?an and his allies have over the last weeks lambasted Central Bank Governor Erdem Ba?ç? for failing to radically lower interest rates to stimulate faltering growth.

Turkey's lira recovered from a record low today as investors weighed up the prospect of a rate cut after the Central Bank governor said a decision on whether to hold an early policy meeting would be made following tomorrow's inflation data.

Governor Erdem Ba?ç? did indeed save the best for last during his briefing on the Central Bank?s first Inflation Report of the year on Jan. 28. At the Q&A session, he said the monetary policy committee (MPC) would cut interest rates at an emergency meeting on Feb. 4 if annual inflation fell more than one percentage point in January.