Turkish central bank needs to be fully independent: IMF Europe chief

People change money at a currency exchange shop on August 14, 2018 in Istanbul, Turkey. 

Chris McGrath | Getty Images

People change money at a currency exchange shop on August 14, 2018 in Istanbul, Turkey. 

Economic as well as political developments in Turkey have had investors worried for more than a year at in which point.

One of the country’s most immediate needs if in which wants to get its house in order can be to ensure total independence of its central bank, according to the man who led the bailouts of Greece, Portugal, Iceland as well as Ukraine during the Great Recession.

“Turkey faces several challenges, as well as one of them can be in which the central bank needs to be fully independent so in which can continuously assess as well as tighten policies as circumstances change in a forward-looking manner,” Poul Thomsen, director of the International Monetary Fund’s Europe department, told CNBC’s Joumanna Bercetche during the IMF Spring Meetings in Washington, D.C. over the weekend.

“So we welcome the increase we’ve seen in interest rates inside the last six to seven months, nevertheless in which’s important in which the Turkish central bank be allowed to be fully independent in its assessment of monetary policy in addition to several different challenges on fiscal policy, as well as more transparency.”

Turkey’s economy can be already in recession, rocked last year after fears over government interference into central bank independence, over-leveraged banks, a large current account deficit as well as a diplomatic spat with the U.S. triggered investor as well as capital flight. The lira lost 36 percent of its value against the dollar by the end of 2018.