Erdogan appoints former US bank executive to head Turkey’s central bank in sign of policy change

ANKARA, Turkey (AP) — Turkish President Recep Tayyip Erdogan on Friday named a former U.S.-based bank executive to head Turkey’s central bank, a further sign that his administration may be pursuing more conventional economic policies.

Erdogan has named Hafize Gaye Erkan, former co-chief executive of the First Republic Bank, as governor, according to an announcement in the Official Gazette. Erkan, 41, educated at Princeton, becomes the first female governor of Turkey’s central bank.

Erdogan won a third presidential term in elections last month as the country grapples with an inflation-fueled cost-of-living crisis that peaked at 85% in October.

Critics attribute the turmoil to Erdogan’s policy of lowering interest rates to promote growth. The approach runs counter to conventional economic thinking which calls for rate hikes to fight inflation.

On Saturday, Erdogan reappointed Mehmet Simsek, a respected former banker, finance minister and deputy prime minister, as finance and treasury minister. Simsek returned to Cabinet after a five-year hiatus from politics.

The appointments of Simsek and Erkan are seen as an indication that Erdogan may abandon policies that many economists have called “unorthodox”.

Erkan was chief executive of investment banking firm Goldman Sachs and worked for the now bankrupt San Francisco-based First Republic Bank, serving as co-CEO for six months in 2021.

She replaces Sahap Kavcioglu who has overseen a series of rate cuts since 2021. Kavcioglu, meanwhile, has been moved to head the country’s banking watchdog, BBDK.

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