Turkish Constitutional Court Invalidates President's Decree on Central Bank Governors

Turkish Constitutional Court Invalidates President's Decree on Central Bank Governors

Sofia Kuznetsova
2 min read

Turkish Constitutional Court Invalidates President Erdoğan's Power Over Central Bank Governors

In a notable development, Turkey's constitutional court has invalidated President Recep Tayyip Erdoğan's decree that empowered him to dismiss central bank governors. This decree had been invoked five times in recent years, prompting concerns about political interference in monetary policy. The court's decision, prompted by a lawsuit from the main opposition party, emphasized the need for legislative approval for such presidential powers, potentially assuaging worries among foreign investors. Despite Erdoğan's previous advocacy for rapid interest rate cuts, he has now pledged to implement "rational policies" to address Turkey's soaring inflation, which reached an alarming 75% annually in May. This rare restraint on Erdoğan's authority signals a possible shift towards greater adherence to the rule of law in a country where the president has historically maintained significant control over state institutions, including the judiciary.

Key Takeaways

  • The Turkish constitutional court's ruling invalidated President Erdoğan's authority to dismiss central bank governors, a power he has exercised on five occasions in recent years.
  • Legislative approval is now deemed necessary for such presidential actions, addressing concerns about political interference in the central bank's functions.
  • Erdoğan's pivot towards "rational policies" to combat Turkey's high inflation, which hit 75% in May, contrasts with his previous advocacy for swift interest rate cuts.
  • The court's action reflects a rare challenge to Erdoğan's dominance, indicating a potential move towards greater observance of the rule of law in Turkey.


The Turkish Constitutional Court's decision to invalidate President Erdoğan's authority over central bank governors serves to allay fears of political meddling in monetary policy, offering a potential boost to investor confidence and currency markets. This ruling, stemming from a 2018 lawsuit, underscores the necessity of legislative approval for presidential interventions, signaling a shift towards heightened institutional autonomy and adherence to legal protocols. In the short term, this development could stabilize investor sentiment and currency markets. In the long run, it may foster enhanced policy predictability and economic stability, crucial elements in addressing Turkey's persistent high inflation. Additionally, the decision poses a challenge to Erdoğan's entrenched control over state institutions, potentially reshaping the political landscape and influencing future economic strategies.

Did You Know?

  • Turkey's Constitutional Court: This highest legal authority in Turkey regarding constitutional matters, is responsible for upholding the constitutionality of laws and safeguarding fundamental rights and freedoms, as evidenced by its recent ruling against President Erdoğan's decree.
  • Recep Tayyip Erdoğan: Serving as the President of Turkey since 2014, Erdoğan has been a prominent figure in Turkish politics, exerting substantial influence over state institutions and known for his assertive leadership style.
  • Central Bank Governors: These key figures play a critical role in national economic management, wielding authority over setting monetary policy, including interest rates, to regulate inflation and stabilize the economy. Their dismissal by political leaders can trigger instability and uncertainty in financial markets.

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