The governor of Turkey's central bank, Gazi Ercel, has resigned after a severe liquidity crisis rocking financial markets forced the government to float the Turkish lira, Turkish press reports said Sunday, February 25. Ercel, 56, submitted his resignation to Turkish Prime Minister Bulent Ecevit on Friday, just two months before his tenure at the central bank was due to end, the liberal Milliyet daily said.
There has been no official confirmation of Ercel's resignation, but he would be the first senior economy bureaucrat to quit after Ecevit's three-way coalition abandoned a key currency peg on Thursday, causing the lira to slump 36.1 percent against the dollar in two days.
Milliyet said the governor's resignation came after Ankara's change of monetary policy made it necessary to revise an ambitious economic program backed by a three-year, $4 billion stand-by deal with the International Monetary Fund (IMF). According to the newspaper, Ercel, who was the architect of the program launched in December 1999, decided to quit on the grounds that the revised program should be implemented by a fresh staff. He had been at the helm of the central bank since April 1996.
Speculation over Ercel's position has mounted after he did not attend a key meeting between senior economy bureuacrats and bankers in Ankara Saturday. The Turkish press generally interpreted Ercel's resignation as a sign the government would make top economy bureaucrats pay for the current financial turmoil, the second in three months. But faced with growing criticism from the opposition and trade unions, Ecevit said Saturday that the cabinet would neither quit nor be reshuffled, saying such a move would only worsen the country's economic woes.
"Rumours spread by certain circles that the government should quit are far from the truth and a change in the cabinet is out of the question," Ecevit said in a written statement after meeting his two coalition partners.
The latest financial crisis broke out on Monday when Ecevit had a fierce row with the president over corruption and declared that there was a "serious crisis." The prospect of political instability sent the Istanbul stock exchange plunging, while interest rates sky-rocketed amid a serious cash shortage. —(AFP)
© Agence France Presse 2000
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