A further indication that his government may adopt more traditional economic policies is the appointment of a former U.S.-based bank executive as the head of Turkey’s central bank by Turkish President Recep Tayyip Erdogan on Friday.
According to a report in the Official Gazette, Erdogan appointed Hafize Gaye Erkan, a former co-chief executive officer of the First Republic Bank, as governor.
Erkan, a 41-year-old Princeton graduate, is appointed as the first female governor of the Turkish central bank.
Erdogan won a third term as president in elections held last month as the nation struggles with a crisis in the cost of living brought on by inflation, which peaked in October at a startling 85%.
Erdogan’s strategy of cutting interest rates to support growth has been criticized as the cause of the unrest.
The strategy goes against traditional economic wisdom, which suggests raising rates to fight inflation.
Mehmet Simsek, a reputable former banker, finance minister, and deputy prime minister, was reappointed by Erdogan to the position of finance and treasury minister on Saturday.
After stepping away from politics for five years, Simsek rejoined the Cabinet.
The nomination of Simsek and Erkan is interpreted as a sign that Erdogan may change his stance on initiatives that many economists have labeled “unorthodox.”
Erkan was a managing director at the Goldman Sachs investment banking organization and worked for the now-failed San Francisco-based First Republic Bank, holding the office of co-CEO for six months in 2021.
She replaces Sahap Kavcioglu, who managed a series of rate reductions in 2021.
Kavcioglu, in the meantime, was reassigned to lead the country’s financial watchdog, BBDK.