CBRT governor faces backlash over family interference claims

The Turkish Central Bank Governor Hafize Gaye Erkan is under spotlight over claims about her father interfering with bureaucratic affairs in the bank. The governor denies rumours, stating she will “use her legal rights.”

The Central Bank of the Turkish Republic (CBRT) governor Hafize Gaye Erkan’s father, Erol Erkan, made the headlines in Türkiye on January 19 as a Central Bank employee, Büşra Bozkurt, filed a complaint to the Presidential Communication Centre claiming that Erol Erkan was interfering with bureaucratic affairs in the bank and fired her even though he does not hold any official role.

Following the controversy, Erkan issued a statement on her social media account, stating that the news reports “targeting her and her family” are “baseless and unacceptable” and that she will use her legal rights against those responsible.

“In recent days, deliberate and untruthful news that is detrimental to the confidence of our bank has been circulated by targeting me and my family,” she said in the post, adding, “I would like to share with the public my surprise and regret at these unfounded allegations, which I learned about during the highly productive meetings we held with important names in the economy and business world in the United States of America.”

“Unfounded news that accuses me and our bank is unacceptable. I will exercise my legal rights against those responsible,” she said.

Allegations about CBRT governor’s father

On January 18, journalist Cem Yıldırım from Sözcü Newspaper published a complaint letter conveyed to the Presidential Communication Centre (CİMER) penned by Central Bank employee Büşra Bozkurt.

According to the news report, the complainant, Bozkurt, claimed in her application to CİMER on January 5, 2024, that Gaye Erkan’s father, Erol Erkan, was unofficially acting as an executive at the bank authorised in human resources affairs and fired her. Bozkurt claimed that the father, Erkan, was allocated a room, a guard, and an office vehicle at the bank.

Bozkurt stated that she had been working as a protocol officer on the floor of the Central Bank Presidency for 4 years.

Bozkurt claimed that Father Erol Erkan asked Bozkurt to be a personal assistant for reception for the governor, but Bozkurt rejected the offer. She alleged that after this conversation she was fired from her position “with the father’s request.”

In Sözcü’s news article, it was claimed that Erol Erkan goes to the bank with his office car and “inspects” the personelle even when his daughter Hafize Gaye Erkan, the CBRT Governor, was in the USA.

In the letter, it was also alleged that “Baba Erkan used the vice president’s room, helped to take care of the governor’s baby with a private nanny in this room, and that he displaced and dismissed many personnel with his instructions.”

CBRT independence

The year 2020 Bozkurt said she started her job was a turbulent year for the bank as President Tayyip Erdoğan took the CBRT presidency from Murat Uysal and gave it to Naci Ağbal.

The bank’s governorship has been changed three times in a row in two years, raising questions about bank’s independence and Erdoğan’s influence over monetary policy.

Erdoğan has been defending keeping the policy rates low, arguing that “high interest rates cause inflation,” and the bank has been keeping the rates low despite surging inflation.

Following the May 2023 victory, Erdoğan reshuffled the economy management, and with Mehmet Şimşek’s taking over the ministry, the CBRT governorship has been changed once more signalling a “return to rational management.”

The new CBRT committee surged interest rates despite Erdoğan’s strong belief in keeping them low to stimulate the economy, opting for fiscal tightening.

Political rumours have been restless as the rumours of Erdoğan’s discontent with the new management as the Turkish surging inflation and currency crisis have proved difficult to curb in a short period of time, despite positive reactions from the international rating agencies.

Questions rised

While Sözcü’s news resonated in economic, political, and bureaucratic circles in the backdrop of management rumors, a series of questions still awaited answers as journalist Murat Yetkin penned on January 18.

• Did CBRT Governor Hafize Gaye Erkan really allocate an office room, bodyguards, and vehicles to her father, Erol Erkan?
• Does her father Erkan really have administrative influence over CBRT executives and employees, by whom, with what authorization, and since when?
• Does Erol Erkan hold any official position, and does he receive any salary for this, either as a staff member or on a contract basis?
• Does the father, Erol Erkan, have access to information on interest rates, exchange rates, and other aspects of the CBRT’s functioning in addition to administrative work?

Further claims about Erkan

On the same day, 10Haber columnist Erdal Sağlam wrote the latest rumours in the political circles that Erkan’s USA visit has caused discontent in the government.

Sağlam stated that the CBRT governor has been in the US for 18 days and “may soon be forced to leave her post.”

According to Sağlam’s op-ed, Erkan’s recent interview to public figure Ahmet Hakan made an impact on the public, and the news about her family “was the last straw.”

“I had witnessed grumblings in the bureaucracy as well as in AKP circles after the Ahmet Hakan interview that caused a stir. After the interview, it was reported that Erkan’s father was constantly interfering in the affairs of the Central Bank in Istanbul and Ankara. It was often said that he took initiative on his own and made promises to the staff on many issues,” Sağlam wrote.

“When I inquired before this article, I learned that Governor Gaye Erkan had not been seen by central bank staff in recent days, but there was no information on her whereabouts. When I asked, I was told that three deputy governors and relevant staff were in Türkiye. I also learned that Governor Gaye Erkan had travelled to the United States on New Year’s Eve before the January 10–11 meetings. This statement by the President probably indicates that she continued to stay in the US after the New York meeting.”