CBRT – A New Governor

“With a decree published in Official Gazette No.31297 dated 7 November 2020, Mr. Naci Ağbal has been appointed as Governor of the Central Bank of the Republic of Turkey (CBRT).”


So we started the day on this Saturday. Problems with the economy, inflation and depreciation of Turkish lira in the recent period were well aware to almost everyone.

Setting aside the extra burden came from Covid-19 to the financial balances of the country, last Monetary Policy Committee decision was crucial in terms of expectations and we have all seen the fold of events afterwards. Now let’s have a closer look to the CBRT governors in the last two decades and evaluate the performance of them on grounds of exchange rate and inflation, which is the only judicial mandate of the CBRT.

On the Table above, you can see the five former governors of the (CBRT) and the new appointed governor at the end of the list. Working time at the CBRT denotes the experience gained on previous duties at the CBRT, which is no longer a prerequisite for the appointment to this post. Therefore Mr. Agbal’s having no working experience at the Central Bank is not a problem. With this opportunity I hope Mr. Agbal’s skills and achievements on the other fronts bring also successes to the CBRT, and wish him all the best.

You can also see how long those governors stayed in the office at the “Duration” column, as well as from the Graph below. After Başçı, governors were not able to achieve their contract terms.

As it is seen, green line, which is the working time at the CBRT, drops dramatically in years. Blue columns are also accompanying to this experience. Mr. Serdengeçti, Mr. Yılmaz and Mr. Başçı fulfilled their terms, but it was not the case for Mr. Çetinkaya and Mr. Uysal. It seems that, meritocracy and working experience paid well in the past.

One last remark on the graph is depreciation of Turkish lira against the US dollar. After a stable decade, depreciation increased in the second ten years. Red line and its relentless slope indicates how deep the problem is.

And my last comment is on the main goal of CBRT, which is the primary objective of the Bank, and it is to achieve and maintain price stability. In the last two decades inflation was, out of one case, stayed above the 5% target, and hit the 25% level after the currency shock in 2018. Although there is a common belief that the real case is worse than numbers reveal, I used the official data from Turkish Statistical Institute (TUIK).

Ergun UNUTMAZ, 07.11.2020