Turkey’s new central bank chief seen as interest rate dove

Turkey’s central bank governor Murat Cetinkaya. (Reuters)
Updated 08 July 2019

Turkey’s new central bank chief seen as interest rate dove

  • Uysal has a degree in economics and a postgraduate degree in banking. He earned his master’s in inflation targeting in Turkey and in the world. He was born in 1971

ANKARA: Turkey’s new central bank governor Murat Uysal, who served as deputy governor for three years before the shock dismissal of his boss, is known as one of the more dovish members of the bank’s interest rate setters.
He has less than three weeks to prepare for the next rate-setting meeting, under pressure from President Tayyip Erdogan’s calls for lower rates to kick-start an economy in recession.
A fall in inflation last month had added to expectations of a rate cut on July 25, but likely US sanctions over Turkey’s purchase of Russian air defense systems, combined with investor jitters over Erdogan’s sacking of the bank governor, could put the lira under renewed pressure and make it harder to cut rates.
Economists and bankers say Uysal has been one of the more dovish members of the Central Bank’s Monetary Policy Committee, describing his views on interest rates as closer to the Turkish president than the previous governor.
“We know that Uysal is more sympathetic about a rate cut than (former governor Murat) Cetinkaya, and that’s why he has been appointed as the central bank governor,” said a senior Turkish banker who predicted a significant rate cut.
Uysal has worked in banking for two decades, holding several senior positions at the majority state-owned Halkbank and its subsidiaries. Bankers say he was respected for his trading in foreign exchange, government debt and derivatives.
“Uysal is on top of money and forex markets. He knows how to read the pulse of markets. He knows the mechanisms of banking and central banking,” a senior Turkish official said.
However, some point to his relative inexperience of monetary policy. “He is not a proper economist, rather a banker,” said one Turkish economist who asked not to be named. “My hunch is that his knowledge of monetary policy has been obtained through ‘on the job training’ as deputy governor.”
The Central Bank said on Saturday Uysal would fully communicate how the bank plans to attain “price stability and financial stability.”
“He will prefer much more frequent communication with markets,” the Turkish official said. “He will be able to explain himself and the central bank policies to the markets and the public effectively.”
Another economic source said Uysal’s communication skills “will stand out,” as he tackles market perceptions that he was appointed to do what the president wants, adding however: “It’s no secret that he defends low rates.”
Uysal has a degree in economics and a postgraduate degree in banking. He earned his master’s in inflation targeting in Turkey and in the world. He was born in 1971.


Down on the farm, Brexit casts its shadow

Updated 11 min 33 sec ago

Down on the farm, Brexit casts its shadow

  • Even with no customs duties to pay, the UK-EU divorce can deliver an unexpected bite

EAST GRINSTEAD, UK: On the face of it, Ellie Woodcock’s organic farm two hours south of London shouldn’t be affected by Britain’s impending departure from the EU.

“We don’t export anything, so that wouldn’t affect my farm. We sell very much directly to the English public and quite locally,” she told AFP.

But even with no customs duties to pay or headaches at the border, Brexit can deliver an unexpected bite.

“I think for the farming community, Brexit will have quite a negative impact,” said Woodcock, who co-manages Brambletye Farm, near East Grinstead, in Sussex.

“The farming community around here really rely on foreign workers, so changes to the legislation and people movement could really affect them.”

“There’s not one positive thing that I can spring out of it, even if I was to twist my mind,” added co-owner Stein Leenders, as he harvested the final fruits of the season.

Brambletye grows apples, pears, raspberries and blackberries, and sells eggs laid by dozens of free-range chickens over its nearly 45 acres of land.

Woodcock, Leenders and their 20-odd employees make or grow virtually everything on site, including fruit purees and bottled juice from a shed housing three busy workers.

“Some of the supplies I might buy from other European countries directly or indirectly through a third party,” said Woodcock.

“One of them would be corks. I also buy mushroom substrate, which comes directly from Holland.”

Such products risk becoming more expensive because of Brexit, which has both made the pound weaker since the 2016 referendum and upped expectations of disruption at the border.

Where Brambletye has opted to focus on a few products, other smallholders bring in fruit from Spain, Portugal and other sunnier European countries to sell during the long rainy winter months.

Fans of organic produce wander among the stalls at The Spread farmers’ market in the trendy Primrose Hill area of London. But the high spirits of the weekend hide a downbeat mood.

“Everything we plant is imported,” said Dave Newton, from Brockmans Farm, at his stall opposite Brambletye’s. “Brexit is going to affect us a lot because prices are going to go up. “Small farms are going to suffer the most.”

Large farms which export most of their produce, and particularly livestock rearers, are facing the threat of financial ruin.

They could see the possible loss of European subsidies and huge customs duties while importers could be given tax free incentives.

“We don’t know what’s going to happen yet in terms of subsidies,” said Mike Norledge, who helps run The Spread.

“A lot of workers have to go back to where they’re from, so that’s a worry,” he added.

Woodcock meanwhile said economic conditions since the landmark Brexit vote have not helped.

“It’s not a particularly glamorous job to pick fruit for eight to 10 hours a day,” she said.

“There was an incentive for workers from poorer countries when the pound was high as they made a lot of money quite quickly.

“With this sometimes xenophobic atmosphere, the big thing with Brexit is do (workers) feel welcome? If they don’t feel welcome and if there’s not a big incentive for the money, then they’re not going to come.”

Woodcock herself only employs locally because she has no facilities to house seasonal workers but has faced great difficulties finding anyone.

“That makes me really worried for other farms. How are they going to manage?” she said.