Ali Babacan

One the recurrent themes in contemporary Turkish politics is President Recep Tayyip Erdo?an?s uneasiness with Turkey?s Central Bank. In the past six months, Erdo?an has repeatedly called on the institution to lower interest rates, but the Central Bank has by and large resisted this political pressure.

Central Bank Governor Erdem Ba?ç?, who was rumored to have resigned on Thursday, just like Deputy Prime Minister Ali Babacan, spoke to me on the phone in a wry tone of voice. He thanked me for my ?get well soon? wishes and said he was using antibiotics. 

The Turkish lira dropped to a record low of 2.5185 against the dollar on Feb. 27, extending losses triggered earlier this week by harsh criticism of the Central Bank from President Recep Tayyip Erdo?an, and on expectations of a U.S. rate hike resulting from stronger-than-expected U.S. durable goods orders.

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.

The ruling Justice and Development Party?s (AK Parti) ?zero problems with neighbors? policy was nothing but a derivative of the Turkish Republic?s strategic position formulated by its founder Mustafa Kemal Atatürk as ?peace at home, peace in the world.?

The global economy's largest problem is a credibility gap, rather than budget deficits, said Deputy Prime Minister Ali Babacan at the first B-20 meeting abroad during Turkey's G-20 presidency.

"The more rapidly we close this credibility gap, the faster we all build confidence. This will bring all of us robust and sustainable growth across the world," he said on Feb. 22.

A senior delegation from the European Bank for Reconstruction and Development (EBRD), led by President Sir Suma Chakrabarti, will visit Turkey on Feb. 19-20 to discuss the bank's investment priorities in Turkey with senior government officials, members of the business community and civil society organizations.

When currency rate policies become a point of daily political polemics in a country, this has many negative effects on the country as a whole, pushing the risk premiums and rates up, making the country less predictable, said Deputy Prime Minister Ali Babacan on Feb. 12, in a TV interview on the state-run TRT channel.

Finance ministers and central bankers face a tough task coordinating action to spur global growth at G-20 meetings this week, with major economies running at different speeds and monetary policies diverging.