Turkish President Recep Tayyip Erdogan named a new central bank governor early Saturday, hours after the sudden resignation of his previous incumbent, who said she was stepping down because of “a major reputation-assassination campaign.”
Outgoing central bank chief Hafize Gaye Erkan was the fifth in five years and the first woman to hold the post. The bank’s deputy governor, Fatih Karahan, was quickly promoted to replace her.
The surprise change came about eight months after the start of a shift in Turkey’s economic program aimed at taming a years-long cost-of-living crisis that has been painful for many Turks. The annual inflation rate was about 65 percent last month.
In an apparent attempt to reassure investors, senior officials said Ms. Erkan’s departure did not signal a change in policy.
Turkish Finance Minister Mehmet Simsek called Ms. Erkan’s departure a personal decision and said she would be replaced by “a respected macroeconomist with exceptionally deep knowledge and expertise.”
He and Vice President Cevdet Yilmaz said Mr. Erdogan continued to support the economic team and its policies.
Starting in 2018, Mr. Erdogan pursued a policy of continually lowering interest rates, even as the value of Turkey’s currency collapsed and inflation soared. This flies in the face of conventional economics, which calls for raising interest rates to curb inflation.
After Mr. Erdogan won re-election in May, he signaled a change in approach with the appointments of Ms. Erkan and Mr. Simsek, returning Turkey to orthodox politics. Since then, the central bank has repeatedly raised interest rates, which reached 45 percent last month.
The new central bank chief, Mr. Karahan, has a doctorate in economics from the University of Pennsylvania, has taught at Columbia University and New York University and worked as an economist for Amazon, according to his official central bank biography. Since July he has been a member of the banking committee, which sets interest rates.
Ms Erkan’s appointment was initially welcomed as her background, which included stints at Goldman Sachs and First Republic Bank in the United States, suggested she would pursue conventional monetary policy.
But rumors have been circulating about her since a Turkish newspaper reported that her father, who has no official role at the bank, had intervened in its operations. The bank denied this allegation.
In a statement posted online late Friday, Ms. Erkan defended her record and said her approach had borne fruit but that she would step down to protect her family and toddler.
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2024-02-03 11:33:33
www.nytimes.com
