AK Party spokesman praises Erdem Basci

ANKARA – The Turkish Central Bank governor Erdem Basci has been "successful," the spokesman of the ruling Justice and Development party said on Wednesday.

"I knew the Turkish Central Bank Governor long before he became the head of the bank. I trust him a lot, and I see that his work at the bank has been very successful," said Besir Atalay at a press conference.  

Central bank governor Basci has been the target of severe criticism from some cabinet members on the pace of interest rate reduction. The government has hinted at replacing Basci, and, on Saturday, Basci moved out of his official residence into a private home. All this has raised speculation about whether he would stay in the job.   

President Recep Tayyip Erdogan has repeatedly complained of the "lack of logic" in the bank's maintenance of relatively high interest rates based on the inflation outlook for Turkey.

The U.S. dollar jumped to a record high against the Turkish lira of over 2.50 on Tuesday, following a run on the lira by investors who drove its value down more than 4 percent over the week. 

That run was apparently triggered by an annoucement made by Basci on Jan. 30 that the bank would hold an emergency meeting to consider a further interest rate cut. 

The bank has already cut the main interest rate on Jan. 20 by 50 basis points  from 8.25 percent to 7.75 percent.

A meeting of the bank's monetary policy committee is scheduled for Feb. 24. The bank is widely expected to announce a further interest rate cut at that time, analysts said.

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