Erdogan tirade against central bank knocks Turkish sentiment

President Tayyip Erdogan’s broadside against the central bank has raised concern about the future of its governor and of respected Deputy Prime Minister Ali Babacan, an anchor of investor confidence in Turkey for more than a decade. Erdogan on Wednesday slammed the bank’s monetary policy as “unsuited to the realities of the Turkish economy” after it failed to meet

his repeated demands for sharper rate cuts than those it had made the previous day. He questioned whether the bank was under external influence. Traders took this as a thinly veiled reference to US-based cleric Fethullah Gulen, a former ally whom Erdogan accuses of infiltrating state institutions in a bid to unseat him. In the past year, its followers have been systematically purged from bodies including the police and judiciary. Babacan, who is in charge of the economy and has been a staunch defender of central bank independence, met Prime Minister Ahmet Davutoglu for more than two hours following Erdogan’s comments, which rattled financial markets.



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