Erdogan says Russian Federation preparing S-400 systems for delivery

Turkish lira weakens to 5.8125 after cenbank governor dismissed

In currency markets, action was in the Turkish lira which weakened to 5.8245 per United States dollar, the lowest since June 25 after Turkey's central bank governor Murat Cetinkaya, whose four-year term was due to run until 2020, was replaced by his deputy Murat Uysal.

"I wouldn't say it's a complete shock but it is definitely a surprise because it looked like the central bank was already on its way to cutting rates", Pictet Asset Management portfolio manager Guido Chamorro, who invested in the bond issue, said of Cetinkaya's sacking.

After the decree came out, Erdogan told lawmakers from his ruling party that politicians and bureaucrats need to get behind his conviction that higher interest rates cause inflation, according to an official who was present.

U.S. President Donald Trump met with Erdogan on the sidelines of last month's G20 summit in Osaka, urging him not to proceed with the purchase of Russia's advanced S-400 ground-to-air defense system.

Isik Securities analyst Yusuf Kavak said the bank was now expected to cut rates more sharply when it meets on July 25.

The country's former deputy prime minister and one-time economy and finance minister, Ali.

The Turkish lira dropped by three per cent in early trading on Monday before recovering some of its losses.

Cetinkaya's "crime" was to refuse to cut rates, Win Thin, New York-based head of currency strategy at Brown Brothers Harriman & Co., wrote in a note.

Asian shares were a sea of red on Monday after strong USA job gains tempered expectations the Federal Reserve will deliver a large rate cut, while the Turkish lira hovered near two-week lows on worries about central bank independence.

Usually in times of the currency crashing, a central bank would raise benchmark rates.

Erdogan has frequently criticized the central bank for keeping rates high.

Uysal, the new governor, said the central bank would continue to "independently implement monetary policy instruments" for price stability. The Hurriyet newspaper said the governor had rejected calls by the president to lower the benchmark interest rate.

Those expectations were tempered by a USA labor report that showed nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000, in a sign the world's largest economy still had the fire.

There were concerns about the bank's independence and also about Turkey's economy.

Under Turkey's new executive presidency, which came into effect previous year, Erdogan does not need Cabinet approval to change the central bank governor.

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