Turkish finance minister Berat Albayrak on July 30 hit back at sceptics who say Turkey’s central bank has lost its monetary independence to the Erdogan administration.

“We need to express this here: the central bank makes its monetary policy and interest rate decisions based on its data set,” he told reporters.

Albayrak also said he anticipated more sharp interest rate cuts from the central bank, following last week’s 425 bp cut in the benchmark rate, the largest reduction seen in at least 17 years.

That came after Albayrak’s father in-law, Turkish President Recep Tayyip Erdogan, fired central bank governor Murat Cetinkaya, arguing he had failed to follow instructions on interest rates.

New governor Murat Uysal has claimed the national lender retains its monetary independence.

“With the serious loosening of interest rates in Turkey in the recent period, and based on the fact that the interest rate trend will come down more clearly and strongly in the coming period, we have entered a period of interest rate cuts,” Albayrak was reported by Reuters as saying.

External factors such as the US Fed and European Central Bank signalling that they are preparing for an easing cycle has helped Turkey’s central bank bring in monetary loosening without causing a depreciation of the embattled Turkish lira (TRY).

Albayrak also told reporters that although the government would miss its target budget deficit-to-GDP ratio, debt levels were not a problem for Ankara. The central government budget recorded a deficit of TRY 78.58bn in the first six months of this year, official data showed. The government’s forecast for the year-end deficit is TRY 80.6bn.

Parliament passed a law earlier this month paving the way for the central bank to transfer its legal reserves to the Treasury. It was seen as a move designed to help plug the deficit.