Ruling Justice and Development Party (AK Party) Deputy Chairman Numan Kurtulmuş targeted the Central Bank of Turkey on Monday, saying the government should handle the institution similarly to how it dealt with military tutelage.
The comments came a day before the central bank was scheduled to meet and decide upon a potential rate cut. Prime Minister Recep Tayyip Erdoğan has been voicing his disapproval of the central bank since late January, when it opted to significantly raise overnight lending and borrowing rates in an attempt to destabilize the plummeting Turkish lira, which had fallen amidst sweeping corruption allegations that emerged after Dec. 17, 2013.
“Institutional independence is fine, but when the government and the central bank are not seeing eye to eye, there is no institutional independence. Maybe the central bank can be independent, but what will happen to the independence of the Turkish Republic? It was easy to spot military tutelage, because they were in uniform, driving tanks with rifles in hand. Turkey has left behind this visible form of tutelage. The next step of the process is to eliminate invisible, veiled tutelage. This will be one of the main items on the government's agenda and the required legal amendments could be made,” Kurtulmuş said.
The prime minister has not refrained from criticizing the institution's decisions. Last month, he complained about what he thought was too low of a rate cut, saying the bank “needed to get its act together.” However, he has said that he recognizes the institution's independence.
Kurtulmuş took things a bit further, saying that the government should target the central bank similar to how it dismantled a decades-old system of military oversight that was responsible for four military coups conducted between 1960 and 1997. The armed forces viewed itself as the defender of the legacy of Turkey's secular reforms instituted by the republic's founder, Mustafa Kemal Atatürk. The AK Party severely weakened the military's grip on politics since coming to power in 2002.
Economy Minister Nihat Zeybekçi directed comments at the central bank on Monday, saying that no one in Turkey wants high interest rates and they should be reduced to where they stood prior to the steep January hike.
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