Erdogan Appoints Wall Street Veteran as Central Bank Governor

Recep Tayyip Erdogan, President of Turkiye, has appointed an economic expert with a background as an executive at a Wall Street bank as the governor of the central bank. Following the appointment of a market-friendly figure as finance minister, the selection of a central bank governor with a similar profile has led to expectations that Turkiye will normalize its unconventional interest rate policies.

According to major foreign media on the 11th (local time), President Erdogan appointed Hafiz Gaye Erkan, former CEO of First Republic Bank, as the governor of the central bank on the 9th.

Erkan, the first woman to be appointed as the governor of Turkiye's central bank, worked for nearly 10 years at the American investment bank Goldman Sachs, specializing in advising on large bank soundness evaluations. In 2021, she served as co-CEO of First Republic Bank, headquartered in San Francisco, before stepping down at the end of the same year. Therefore, she did not directly experience the US banking crisis that erupted earlier this year.

The appointment of the new governor Erkan has raised expectations that Turkiye's monetary policy will be normalized.

Until now, Turkiye has been criticized for worsening the situation by maintaining low interest rates instead of raising them to curb high inflation. Turkiye's inflation soared to 85% as of October last year, and the value of the lira has fallen more than 10% against the dollar since the beginning of this year.

The market is increasingly betting on the possibility that the Turkiye government will reduce its control over the central bank and shift to orthodox economic policies that curb high inflation through interest rate hikes. In particular, the appointment of former Deputy Prime Minister Mehmet Simsek, a former investment banker at Merrill Lynch in London, UK, as finance minister has strengthened the view that Turkiye will normalize its economic policies.

This content was produced with the assistance of AI translation services.