Prime Minister Ahmet Davutoglu has reportedly picked Murat Cetinkaya, current deputy governor of the central bank, as the new governor to replace Erdem Basci.
The government decree regarding Cetinkaya’s appointment will be submitted to the cabinet for approval on April 11, officials told Reuters. Current governor Erdem Basci’s five-year term as the central bank’s governor expires on April 19.
Born in 1976, Cetinkaya graduated from Bogazici University, one of the most prestigious schools in Turkey, where he studied political sciences and international relations. According to his biography on the central bank’s website, Cetinkaya began his career in the banking industry at the Islamic lender Al Baraka Turk. He joined the state-owned lender Halkbank in 2003. Cetinkaya worked at Halkbank as the head of the international banking and structured finance department and then as deputy general manager for international banking and investor relations. Cetinkaya has served as a deputy governor of the central bank since June 2012.
“Reports that Cetinkaya will take over as governor are likely to reassure the markets that President [Recep Tayyip] Erdogan’s clear desire for interest rates to be lowered hasn’t translated into the appointment of a malleable and unknown governor inclined to do the president’s bidding,” said Capital Economics on April 11 in an emailed comment. “But even so, Mr Cetinkaya will struggle to resist increasingly vocal demands for monetary easing (even if there’s no economic justification for doing so).”
Tim Ash at Nomura agrees with Capital Economics that Cetinkaya’s appointment looks like a compromise between Davutoglu and Erdogan. “Compromise candidate, so good that the presidency and government are working together on this - one less potential hiccup. A battle over the nomination would have been very market negative”, said Ash.
Cetinkaya's state banking track record underscores his perceived loyalty to the presidency/AKP (Justice and Development Party), according to Ash.
“I guess much less of a monetary policy guru than Basci, but I guess the market never really appreciated that anyway - Basci tended to overcomplicate things when the market wanted a much simpler policy, and the proof of the pudding I guess is in the consistent failure by the CBRT to meet the inflation target,” Ash said in an emailed commentary.
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