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Turkey Appoints Fatih Karahan as New Central Bank Governor

Sun 04 Feb 2024 | 03:17 AM
Taarek Refaat

Turkish President Recep Tayyip Erdogan issued a decision appointing Deputy Governor of the Central Bank Fatih Karahan as the new governor of the bank, following the resignation of Hafiza Ghaya Erkan, and in what was published in the country’s Official Gazette and reported by Sky News,

Erkan attributed her resignation to reasons including the need to protect her family amid the “assassination of her reputation,” which raised doubts about the strong monetary tightening policy she had followed.

She is the first woman to head the Turkish Central Bank and the fifth governor to leave this position in five years, after President Recep Tayyip Erdogan dismissed the last four governors, which led to the erosion of the bank’s independence.

Senior figures in the Cabinet quickly said that the economic program would continue after her departure.

Erdogan appointed Erkan in June to implement a complete shift away from unconventional policies that included lowering interest rates and led to a sharp rise in inflation and the flight of foreign investors.

Since June, the central bank has raised the key interest rate to 45% from 8.5%.

After another 250 basis point increase, the bank said last week that it had tightened policy enough to achieve a decline in inflation, indicating a possible pause.

Erkan, a former executive at a major American bank, said that “her economic program has begun to bear fruit,” pointing to the rise in foreign currency reserves and improved expectations that inflation will begin to decline around the middle of the year “as evidence of this success.”