President Erdogan has named Hafize Gaye Erkan, a banking executive from the United States, as the new governor of the Central Bank in Turkey. This appointment reflects Erdogan’s efforts to stabilize the economy by adhering to conventional financial standards.
President Erdogan has named Hafize Gaye Erkan, a banking executive from the United States, as the new governor of the Central Bank in Turkey. This appointment reflects Erdogan’s efforts to stabilize the economy by adhering to conventional financial standards.
Erkan will become the first female central bank governor in the nation’s history.
This decision comes after Mehmet Simsek was appointed as the new finance and treasury minister, indicating a significant departure from Erdogan’s unconventional economic policies. This change comes at a critical time as Turkey faces a severe cost-of-living crisis and rapid inflation. Official data released in late May revealed that the Turkish Central Bank’s net foreign reserves fell below zero for the first time since 2002, while the country’s inflation rate reached 39.59% year-on-year in May.
She will become the fifth governor of the Central Bank during Erdogan’s executive presidency, a period marked by significant shifts in monetary policy. Her predecessor, Sahap Kavcioglu, was previously a columnist for a pro-government newspaper and was appointed despite criticizing the previous governor’s decision to raise interest rates. Following Erdogan’s directive, Kavcioglu reduced interest rates drastically, even as inflation surged. Critics have accused Erdogan’s administration of undermining the Central Bank’s independence and depleting its foreign reserves in order to avoid a currency crisis amid a declining lira.
Erkan’s appointment is expected to restore the Central Bank’s reputation as an autonomous economic player. Similarly, Simsek, who, like Erkan, is internationally respected, emphasized the importance of adopting rational economic policies during the transition of power.
These two appointments are anticipated to guide the country toward a more stable and predictable economic trajectory. The risk premium associated with Turkey, which skyrocketed by over 700 basis points before the general elections on May 14, has declined to below 500 basis points following Simsek’s appointment.
About Gaye Erkan
Erkan, earned a bachelor’s degree in industrial engineering from Istanbul’s Bogazici University, graduating as valedictorian, and a doctorate in operations research and financial engineering at Princeton University.
Erkan also completed two training programmes on management sciences at Harvard Business School and leadership at Stanford University.
Erkan, who joined the board of directors of the US financial services group Marsh & McLennan Companies in the previous year, had previously served on the board of directors for Tiffany & Co. between 2019 and 2021.
As a Princeton graduate, Erkan had also held the position of co-CEO at First Republic Bank. However, the bank experienced a collapse earlier this year and was subsequently acquired by Goldman Sachs.
From the early 2000s until 2014, Erkan held several roles at Goldman Sachs, including managing director and head of the Financial Institutions Group.
Erkan, the first woman under the age of 40 to hold the title of president or CEO at one of America’s 100 largest banks, made the “40 Under 40” lists of both San Francisco Business Times and Crain New York Business.
In 2019, Erkan was included in Crain’s “Notable Women of Banking & Finance” and American Banker’s “Women to Watch” list.