July 26, 2019 / 1:56 PM / a month ago

Turkey to begin moving central bank, Treasury units to Istanbul -sources

ISTANBUL (Reuters) - Turkey plans to begin transferring some units of its central bank and Treasury to Istanbul from the capital Ankara by year-end as part of a government effort to boost the city’s financial clout, according to three people familiar with the plans.

FILE PHOTO: Turkish Treasury and Finance Minister Berat Albayrak and European Commission Vice President Jyrki Katainen chat as they walk by the Bosphorus during a break to the EU-Turkey High Level Economic Dialogue Meeting in Istanbul, Turkey, February 28, 2019. REUTERS/Umit Bektas/File Photo

Most of the central bank’s functions, including its key decisions and operations, are expected to be relocated to the country’s largest city within two years, the sources said, adding initial work on the move will start soon.

Reuters reported in April that units of the Treasury and Finance Ministry, run by President Tayyip Erdogan’s son-in-law Berat Albayrak, were to be moved to Istanbul. It was unclear how long the ministry’s move would take to complete.

The sources, who requested anonymity because they were not authorized to speak publicly, said the plan was to ultimately move the bank and ministry to the now partially-built Istanbul Finance Center on the city’s eastern side, in Asia.

It was unclear which buildings they would occupy there.

“There is a will to move the central bank as well as some public institutions to Istanbul as part of the Finance Center project,” one of the sources told Reuters.

“The relocation of some main units of the central bank is planned to be completed by the end of this year.”

The central bank declined to comment. The Treasury was not immediately available to comment.

Central banks are typically located in capital cities though there are exceptions such as the Reserve Bank of India, which is headquartered in Mumbai not New Delhi.

Several Turkish public institutions including the banking watchdog and state lenders have already been moved to Istanbul in recent years.

“Istanbul will be the location of some important decision making institutions in the government,” a second source said. “Not all bureaucrats are happy about the decision.”

According to the government’s plan, the central bank’s move is to be complete before early 2022, when the Istanbul Finance Center project is expected to be fully operational, the three sources said.

Under pressure from Erdogan to boost the recession-hit economy, Turkey’s central bank slashed its key interest rate on Thursday by 425 basis points to below 20%.

Writing by Ezgi Erkoyun; Editing by Jonathan Spicer, William Maclean

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