Turkey probes former central bank governor over economic crisis

Published April 15th, 2001 - 02:00 GMT

Turkey's Prime Minister Bulent Ecevit has given the green light for an inquiry into allegations that a former central bank governor abused his position to benefit from last month's economic crisis, the prime minister's office said Thursday, April 12. 


Ecevit approved the inquiry into activities by Gazi Ercel on the recommendation of the chief prosecutor's office, it said. "The prime minister has given permission for a preliminary investigation on Gazi Ercel and has authorized inspectors from his office to carry out the task," the statement said. 


The move was prompted by allegations in several Turkish newspapers on Tuesday that Ercel converted holdings of Turkish lira into dollars just before Ankara abandoned a pegged currency regime and floated the lira on February 22, a move which sent the value of the lira plunging. 


The mass-circulation Sabah alleged the former central bank governor made an 80-percent profit in 45 days as the lira slid some 47 percent against the dollar. 


Ercel, who resigned in late February following the financial turmoil, has denied any wrongdoing, and claimed in a newspaper interview Wednesday that the currency dealings were done by friends without his knowledge. 


A second claim relates to some $4 billion which were sold by the central bank a day before the currency was cut loose from its peg. According to the allegations, Ercel authorized the sale of dollars to some banks at a previous rate and not the then-valid exchange rate. 


In an interview with the liberal Milliyet daily on Thursday, Ecevit said that he sent a letter to the central bank demanding details on how much was sold in dollars from the bank's reserves and to whom on the day in question. 


At the end of the preliminary investigation, the prime minister's office will decide whether there is any need for an official investigation—which would be carried out by the chief prosecutor's office. 


Ankara's flotation of the lira has battered the already fragile economy and disrupted a three-year anti-inflation program backed by a $4 billion loan from the International Monetary Fund. Turkey's new economy minister, Kemal Dervis, is scheduled to announce a new economic program on Saturday to put the country back on track. —(AFP)  


© Agence France Presse 2001  

© 2001 Mena Report (www.menareport.com)

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