Türkiye’s Constitutional court stripped the power of dismissing central bank governor from the President of the republic

Türkiye’s Constitutional Court ruled on Tuesday stripping President Recep Tayyip Erdogan of the power to dismiss the central bank governor before his term ends.

The court overturned a 2018 legal decree that gave Erdogan the power to appoint and dismiss the central bank governor and his deputies.

The court stated that this must be regulated by a law of parliament, and that the new decision will take effect after 12 months, giving parliament a period to pass the necessary legislation.

Over the past five years, Erdogan has sacked five central bank governors, raising concerns about the financial institution’s independence and fear of its instability.

These repeated dismissals led to fiscal policies that contributed to the depreciation of the Turkish lira and increased inflation.

Last February, Erdogan appointed Fatih Karahan as governor of the central bank, who has continued to implement the strict monetary tightening policy that has been in place since a radical shift in monetary policy in June last year.