Turkey: new central bank chief - new course?
The Central Bank of Turkey has a new boss again: after Hafize Gaye Erkan announced her resignation at the weekend her deputy Fatih Karahan was appointed as her successor. Erkan said she had been the victim of a major smear campaign. In recent weeks she was dogged by accusations of nepotism; her father is said to have used company cars and even made personnel decisions.
It shouldn’t have come to this
Erkan had such promising qualities, laments Hürriyet:
“She was the first female head of Turkey’s central bank. Second, her experience and knowledge are indisputable. Third, she had given up her career in the US to return to Turkey. Fourth: there was enormous potential for harmony between her and [Finance Minister] Mehmet Şimşek. The appointment of Gaye Erkan was received very favourably because of these four factors. ... But then strange things happened: ... The allegations against her father hit the headlines. She became the victim of a major campaign. ... A communication strategy could have been developed that would have prevented the controversy from escalating. Unfortunately, Erkan wasn’t able to do that. She was exhausted, drained.”
Impact will be limited
A return to Erdoğan’s unorthodox monetary policy is not to be expected, former deputy director general of the Central Bank of Turkey Fatih Özatay writes on Yetkin Report:
“The current economic programme is not working, and one of the main reasons for this is the suspicion, based on past experience, that it constitutes a ‘return to a policy that was deemed to be unreasonable’. This doubt persists despite the increase in the base rate from 8.5 to 45 percent and despite the tax measures aimed at preventing the budget deficit from rising to horrendous levels. ... However, it cannot be assumed that this change of boss will bring about a change of course. ... With the exception of the governor, the team that has been implementing monetary policy since June will remain in office.”
