Türkiye: new change at the head of the country's Central Bank

The governor of the Central Bank of Turkey, Hafize Gaye Erkan, in office for less than a year, announced her resignation following a scandal involving her family. The banker, the first Turkish woman in this position and very popular in the markets, is accused by several media of having granted advantages to her family within the institution, which she denies. President Recep Tayyip Erdogan probably wanted to get rid of a controversy less than two months before the local elections.

The resigning governor of the Turkish Central Bank, Hafize Gaye Erkan, in Ankara on July 27, 2023 (illustrative image). AFP - HANDOUT

By: RFI Follow

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With our correspondent in Istanbul,

Anne Andlauer

Since the publication, in mid-January 2024, of articles accusing him of having let his father “

settle

” at the headquarters of the

Turkish

Central Bank and make decisions there completely illegally, Hafize Gaye Erkan knew that his days at the head of the institution were numbered.

Certainly,

Recep Tayyip Erdogan

had supported it, denouncing “

grotesque gossip

” aimed, according to him, at “

disturbing the stability

” of the Turkish economy. But, as the municipal elections on March 31 approach, the president wants to avoid controversies and only surround himself with personalities in whom he has complete confidence.

Rate increase

Unlike many of her predecessors, Hafize Gaye Erkan was therefore not fired because she was reluctant to apply the policy dictated by the president. On the contrary, she convincingly defended the turn taken after the May 2023 elections, which consisted of sharply increasing Central Bank rates to combat record inflation, a method that Tayyip Erdogan had rejected for years.

Fatih Karahan, the successor to Hafize Gaye Erkan who, like her, spent her career in the United States, should continue this policy supported by the markets and foreign investors, at least until the elections. 

Also read: Turkish banks refuse transactions from Russia

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