ECONOMY

Patience needed for new Turk bank chief

ANKARA (Reuters) – Turkish Foreign Minister Abdullah Gul called for patience yesterday over a change of guard at the central bank, saying the president needed time to evaluate the government’s candidate for the post of governor. President Ahmet Necdet Sezer received the government’s proposal for the next central bank governor on Wednesday but has two weeks in which to approve or veto the nominee. Turkish media have speculated that Sezer might block the Cabinet’s choice. «Nobody has the right to expect President Sezer to approve everything without looking, without asking anything,» Gul told reporters before leaving on a trip to Tunisia. «So I am of the view that it is wrong to write in terms of ‘the president has returned (our proposal),’» Gul said, referring to reports that Sezer has decided to use his veto. The central bank named Deputy Governor Erdem Basci as acting governor on Tuesday after incumbent Sureyya Serdengecti’s five-year term expired. Basci is also widely believed to be the government’s favored candidate to become permanent governor. The media speculation about a presidential veto has focused on the fact that Basci’s wife wears the Muslim headscarf. Sezer, a staunch secularist, does not allow the wives of Prime Minister Recep Tayyip Erdogan and other senior ministers to enter the presidential palace because they too wear headscarves, seen by secularists as a threat to Turkey’s political order. Gul said monetary policy would remain unchanged under a new central bank governor. «A normal process is continuing, there is no question of any problems. Economic policies will continue unchanged,» he said. If Sezer approves the government’s choice, the decision will be announced in the next two weeks in the official gazette. But a presidential veto could seriously upset Turkish markets, already jittery over rising interest rates in the United States and Europe, and stoke tensions between Turkey’s political institutions ahead of elections due in 2007. Turkish financial markets were firmer yesterday amid hopes that Sezer will endorse the government’s candidate for governor. Serdengecti won respect in Turkey’s financial markets for reducing inflation to single digits for the first time in a generation, but exporters accused him of hurting Turkish industry with high borrowing costs and a strong lira. Serdengecti’s relations with Erdogan’s AK Party were also cool. Basci, a 40-year-old former academic, is by contrast a close friend of Economy Minister Ali Babacan.