Former central bank governor faced pressure from President Erdogan to lower interest rates to revive shrinking economy.

Turkey has fired its central bank governor without giving an official reason, as policy differences between the government and the bank deepened in the face of an economic slump.

Murat Cetinkaya, who had been serving as the governor since April 2016, was removed from the role and was replaced by his deputy Murat Uysal, a presidential decree published on the official gazette on Saturday said.

Markets have speculated over recent weeks that Cetinkaya may be pushed out by the government because of his reluctance to cut rates.

The central bank has faced pressure in the past from President Recep Tayyip Erdogan to lower interest rates to revive an economy which slipped into recession earlier this year.

The Turkish economy shrank sharply for the second straight quarter in early 2019 as a currency crisis, amid soaring inflation and interest rates, took a heavy toll on overall output.

Erdogan slams interest rates

Two government sources told the Reuters news agency that differences between the government and the governor over the conduct of monetary policy have deepened in the past few months.

Cetinkaya had hiked the benchmark interest rate by a total of 625 basis points last year to support the ailing lira, pushing it to 24 percent by September where it has since been left unchanged.

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Erdogan, whose son-in-law is the finance and treasury minister, repeatedly criticised the central bank for keeping rates high.

In a statement on Saturday, the central bank said it will continue to operate independently and that the new governor will focus on maintaining price stability as its key goal.

“In his first remarks, Murat Uysal, said that the communication channels would be used at the highest level in line with the price and financial stability goals,” the bank said.

“He will hold a press conference within this frame in the coming days,” the statement added.