Turkish President Recep Tayyip Erdogan appointed a new central bank governor early Saturday morning, hours after the sudden resignation of the previous appointee, who said he was resigning due to a “massive defamation campaign.”
Outgoing central bank governor Hafizeh Gey Erkan is the fifth woman to hold the post in the past five years and the first woman to hold the post. Fatih Karahan, the bank’s deputy governor, was swiftly promoted to replace her.
The surprise change comes about eight months after a shift in Turkey’s economic plan aimed at quelling a long-standing cost of living crisis that has been painful for many Turks. The annual inflation rate as of last month was about 65%.
In an apparent effort to reassure investors, government officials said Mr. Elkann’s resignation did not signal a change in policy.
Turkish Finance Minister Mehmet Simsek said Erkan’s resignation was a personal decision and that he would be replaced by a “reputable macroeconomist with exceptional depth and expertise.”
He and Vice President Cevdet Yilmaz said Erdogan would continue to support his economic team and its policies.
Starting in 2018, Mr. Erdogan oversaw a policy of continually lowering interest rates even as the value of Turkey’s currency plummeted and inflation soared. This went against conventional economics, which calls for raising interest rates to stop inflation.
After his reelection in May, Mr. Erdogan signaled a shift in approach by appointing Mr. Ercan and Mr. Simsek, guiding Turkey back to policy orthodoxy. The central bank has since raised interest rates multiple times, reaching 45 percent last month.
Callahan, the new bank president, holds a doctorate in economics from the University of Pennsylvania, has taught at Columbia University and New York University, and previously worked as an economist at Amazon, according to the central bank’s official biography. He has been a member of the Banking Committee, which sets interest rates, since July.
Elkann’s appointment was initially welcomed because her background, which includes stints at Goldman Sachs and First Republic Bank in the US, suggested she would pursue conventional monetary policy.
However, she has been dogged by rumors ever since a Turkish newspaper reported that her father, who does not hold an official position at the bank, had intervened in the bank’s affairs. The bank denies the allegations.
in statement Elkann defended his career in an online post late Friday, saying that although his efforts were beginning to bear fruit, he was stepping down to protect his family and young children.
