![](https://theceopublication.com/wp-content/uploads/2024/09/Foster-USA-Wins-Winston-Salem-Council-Approval-for-Incentives.png)
June 12, 2023: Turkey’s President Recep Tayyip Erdogan has appointed a retired Wall Street banker Hafize Gaye Erkan as the country’s recent central bank governor, another move that could mark a policy pivot away from economic unorthodoxy.
Erkan, Turkey’s foremost female central bank chief, was a retired managing director and co-CEO at First Republic Bank.
She is also Turkey’s fifth central bank governor in four years.
Her appointment, alongside new economy minister Mehmet Simsek’s, could be a sign that Turkey’s economic policy will normalize following years of ultra-low borrowing costs and soaring inflation, analysts say.
“Given her training at Princeton and top-level experience in the U.S. banking sector, I assume that the new governor will return to orthodox policies,” Selva Demiralp, a professor of economics at Koç University in Istanbul, told CNBC in an e-mail.
The caveat would lie in how much autonomy the central bank could exercise and to what extent, something that Demiralp says investors will have to wait and see.
That verdict could come sooner, two weeks, when the central bank convenes for an interest speed decision conference.
Demiralp expects a rate hike in the next central bank meeting, “taking the policy rate to a level of about 25 percent or higher could be a good first step,” she said.
On the weekend, Turkish President Recep Tayyip Erdogan selected former economy chief Simsek as the latest treasury and economy minister. He was known for his market-friendly policies.
Timothy Ash, senior emerging markets sovereign strategist from BlueBay Asset Management, stated that “markets will be doubly pleased” by Erkan’s appointment as central bank chief.
He said both Erkan and Simsek would make a “top-notch team.”
According to the Official Gazette, Erkan’s predecessor Sahap Kavcioglu was named head of the Banking Regulation and Supervision Agency (BRSA).
“Simsek and Erkan will be considered on monetary policy moves, inflation, and lira. Guess Erdogan saw some use in maintaining Kavcioglu in the wings,” Ash tweeted.
“Appointment of Kavcioglu at BRSA has complicated things for Simsek,” Ash said in another tweet, counting that markets will focus on whether the Simsek-Erkan partnership can deliver policy drawing sufficient to save the freefalling lira.
© THE CEO PUBLICATION 2021 | All rights reserved. Terms and condition | Privacy and Policy