DThe public had already gotten used to the fact that Turkish central bank presidents did not stay in office for long. But the fact that they are resigning on their own may also have been a new experience for President Recep Tayyip Erdoğan, who previously dismissed them via an announcement in the official gazette. In any case, Governor Hafize Gaye Erkan unexpectedly announced on Friday in a post on her personal X account, just eight months after her appointment, that she was resigning from office for personal reasons.
Vice President Cevdet Yilmaz and Finance Minister Mehmet Şimşek quickly rushed to announce that the monetary and economic policy, which was radically changed after Erdoğan's re-election in May, would continue without interruption. Erkan, who had a career as a bank manager in the United States, had embodied this change: as the first woman in the governor's chair and as the one who had raised the key interest rate from 8.5 to 45 percent since June.
The 44-year-old had recently gained increasing confidence in the international financial markets. There it was accepted that she was really serious about returning to an “orthodox monetary policy” and combating inflation, which has recently reached 65 percent in Turkey. This personal trust was lost when she resigned, and the already weak lira immediately lost value.
Erkan complains about “character assassination campaign”
Erkan justified her resignation with an alleged public smear campaign against her. “A major character assassination campaign has been organized against me recently,” she wrote on the X platform. She had to protect herself, her one-and-a-half-year-old child and her family. Confessions about alleged nepotism in the central bank had recently appeared in Turkish newspapers, according to which Erkan's father, who has no official position there, had harassed and fired staff. Erkan had rejected the allegations.
She thanked President Erdoğan and thanked him and Şimşek for his support during their term in office.
Erdoğan recently publicly backed her and castigated the “astonishing gossip that will disrupt the climate of trust and stability in our economy.” Erkan had previously taken to the media boulevard herself when she reported in a newspaper interview that she had moved back in with her parents due to the high real estate prices. This made international headlines for the woman who made a million-dollar fortune in the USA.
The Finance Ministry said Erkan made the decision “entirely personally and at his own discretion.” Erdoğan continues to have “full trust and support in our economic team and our program.” Doubts about this were repeatedly expressed because, until his re-election, Erdoğan had publicly criticized high interest rates as the wrong approach, even though in classical economics they are considered the most important means of combating hyperinflation, as Turkey has been experiencing for more than two years now lived through years. According to central bank estimates, inflation will peak at 75 percent in the first half of the year and then decline.
According to a report by the Bloomberg agency, which cites insiders, Fatih Karahan, one of the deputy governors, is considered a candidate to replace Erkan. Karahn is a graduate of Istanbul's Bogazici University and worked as an economist at the New York Federal Reserve Bank, according to his biography on the central bank's website. He has also taught at Columbia University and New York University and worked as chief economist for Amazon.com.
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