Middle East

Erdogan wants to overhaul Turkey cbank

Ex-central bank governor Murat Cetinkaya was abruptly dismissed last week by the Turkish President. (AAP)

Turkey's President Tayyip Erdogan dismissed central bank governor Murat Cetinkaya on Saturday and now wants to overhaul the institution.

President Tayyip Erdogan says Turkey could face serious problems if its central bank is not completely overhauled after last week's dismissal of governor Murat Cetinkaya.

A presidential decree on Saturday showed Cetinkaya, whose four-year term was due to run until 2020, had been replaced by his deputy Murat Uysal, reigniting concerns about political interference in monetary policy.

Erdogan told reporters on his airplane returning from a trip to Bosnia that Cetinkaya had made decisions for which a high price was paid and he had not inspired confidence or communicated well with the market, the Haberturk news website reported.

"The central bank is the most important element in the economy's financial pillar," Erdogan said.

"If we do not revise it completely, if we don't put it on solid foundations, we may face living with serious problems."

"Most importantly, he did not inspire confidence in markets. His communication with markets was not good," he added.

Erdogan, a frequent critic of high interest rates, has often called for lower rates to kickstart the now recession-hit economy.

The lira weakened after Saturday's move.

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