Turkish President Recep Tayyip Erdogan named Hafize Gaye Erkan as the new governor of the central bank, replacing Sahap Kavcioglu after slightly more than two years in the job.
(Bloomberg) — Turkish President Recep Tayyip Erdogan named Hafize Gaye Erkan as the new governor of the central bank, replacing Sahap Kavcioglu after slightly more than two years in the job.
The announcement, made through a decree in the Official Gazette, completes a makeover of Erdogan’s economic team following Mehmet Simsek’s appointment as treasury and finance minister — appointments that may signal a return to more conventional policies.
Before installing Kavcioglu as governor in March 2021, Erdogan ousted his three predecessors for tightening monetary policy too much as he wielded more power over the direction of interest rates.
Kavcioglu never deviated from Erdogan’s unorthodox belief that cutting rates can curb inflation. Despite price growth reaching a peak of 86% last year, the central bank under his stewardship delivered zero rate hikes and instead slashed the benchmark to 8.5% from 19% at the start of his tenure.
Erdogan was reelected in May on promises of further rate cuts before giving control of the economy to Simsek, who immediately signaled that Turkey had no choice but to make it a priority “to fight inflation on a rational basis.”
The next rate-setting meeting, scheduled for June 22, will show whether Erdogan will acquiesce to tighter policy in his new term.
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