Turkish Central Bank Governor Erkan “removed from office”

The Central Bank of Turkish Republic (CBRT) Governor Hafize Gaye Erkan “has been removed from office” by a Presidential Decree following contraversy surrounding her family’s unofficial involvement in the bank’s administration.

The Deputy Governor Fatih Karahan is appointed as the new governor.

“The President (Governor) of the Central Bank of the Republic of Turkey, Hafize Gaye Erkan, has been removed from office in accordance with the supplementary 35th article of Law No. 375 and the 2nd article of Presidential Decree No. 3,” the decree on the official gazette read on February 3rd.

“Following this, the position of the President (Governor) of the Central Bank of the Republic of Turkey, which became vacant as a result, has been appointed to Deputy President (Governor) Fatih Karahan in accordance with the 25th article of Law No. 1211 dated 14/1/1970 and the 2nd, 3rd, and 7th articles of Presidential Decree No. 3,” it read.

Erkan declared “her resignation”

CBRT Governor Hafize Gaye Erkan announced her resignation on February 2nd through a social media post, citing personal reasons and “a targeted campaign affecting her family’s reputation”.

“In the face of a significant character assassination campaign directed towards me in recent times, and to protect my innocent child from further impact, I have requested my resignation from the honorable duty I have proudly carried out since the beginning under the leadership of our esteemed President,” she stated in the post, as the resignation came on the heels of allegations that her father, Erol Erkan, interfered in bureaucratic affairs at the bank.

Just after Erkan’s resignation post, the Treasury and Finance Minister Mehmet Şimşek also made a statement, underlying that the decision was “entirely personal”. He added that he presented his recomendation for the new Central Bank Governor to the Presidency.

However, sources closed to the economy management revealed to YetkinReport that Şimşek proposed Erkan’s resignation to the Presidency, citing concerns about the controversies surrounding her family, which he deemed inconsistent with the Central Bank’s credibility and working methods.

Contraversy about Erkan and her family

The background to her resignation involves allegations of her father’s unofficial involvement in the bank’s administrative matters,

The controversy surrounding Erkan’s father allegedly using an office room, staff, and vehicles at the bank fueled speculations about administrative influence.

Questions regarding Erkan’s prolonged stay in the United States following her stay in December and potential discontent in the government added complexity to the situation.

As Türkiye navigates these developments, the resignation of its first female Central Bank Governor raises broader questions about the country’s economic management and the Central Bank’s role in maintaining stability.

The search for Erkan’s successor will be closely watched as Turkey seeks continuity and stability in its monetary policies.

Took the office amid economic crisis

Erkan, who took office amid President Recep Tayyip Erdoğan’s unorthodox economic policies, faced a contentious tenure marked by conflicting views on interest rates and a series of leadership changes.

Erkan’s successor will be the fifth governor that resumed the seat after 2018 Presidential Government System shift.

The central bank’s independence has been a subject of concern, with Erdoğan’s centralization efforts impacting key institutions.

Erkan, joined the Central Bank with a background diverging from President Erdoğan’s economic philosophy. The swift rate cuts by the previous governor, Şahap Kavcıoğlu, heightened inflation concerns and strained the lira. Erkan, inheriting these challenges, is tasked with steering the bank through a delicate economic landscape with Finance Minister Şimşek’s commitment to “rational policies.”

Erkan’s resignation, coming amidst broader economic shifts and leadership changes, underscores the intricate challenges facing Turkey’s economic landscape. As the nation strives for stability and effective monetary policies, the search for Erkan’s successor will be closely monitored, influencing the trajectory of Turkey’s economic recovery.