Actually I have some empathy with the feelings of the government. It is usual these days to praise "independent" Central Banks. People who had nothing else good to say about the New Labour Government, even Tories, praised Gordon Brown for giving the Bank of England "independent status". Not me. OK, it seems having an independent CB seems better than allowing politicians to go on a mad money spurge just before a General Election to boost the ruling party's popularity - just as RTE wants now. But the BoE, and in RTE's eyes the Turkish CB, are not "independent". They are the stooges of the financial markets. The BoE follows policies demanded by the Square Mile of the City of London. Former Governor of the BoE let the cat out of bag when he said that unemployment in the North East of England was a price worth paying for controlling (house price driven) in the South East. The BoE does not take what is good for the British economy as a major factor in its calculations. I'm sure Erdogan sees Basci in the same way.
But I also have some sympathy for Basci. Governors of CBs around the world were fascinated by his innovative policy of controlling exchange markets by talking openly to them. On Friday he calmed markets, not by increasing interest rates, not by "burning" millions of dollars, but by telling the markets that the CB would act cautiously. It worked. The lira firmed, the future looked stable until the next meeting. Then Erdogan and his sidekick weigh-in with strong noises and, within hours, the lira hits an all-time low against the dollar. Apparently Basci considered resigning in the Autumn. He might be considering it again. How long can he expected to keep banging his head against the AKP wall?
