Türkiye’s central bank governor has been named by Forbes among the women to keep an eye on in 2024.

Hafize Gaye Erkan took the helm of the Central Bank of the Republic of Türkiye (CBRT) in June after President Recep Tayyip Erdoğan named her to be a part of the new economy team to lead a shift to more conventional monetary policymaking.

A former senior U.S.-based bank executive, Erkan is the first woman to lead the Turkish central bank.

Forbes named her among the women whose influence is on the rise.

These also include Claudia Sheinbaum and Xochitl Galvez, the two Mexican nominees who will compete in the June 2024 presidential election.

Regardless of the results, it will mark the first time a woman leads the North American nation.

The list also included Janet Truncale, who will become global accounting firm EY’s global chair and CEO in July 2024.

Alongside Erkan is Michele Bullock, who became the first woman to lead Australia’s central bank in September.

“They’ve also assumed their positions at a moment when high inflationary trends have put economic pressure on both of their countries,” the magazine said.

Erkan, a former Goldman Sachs banker, is tasked with restoring consumer and investor confidence in the Turkish lira. At the same time, Bullock recently told a group of economists in Sydney that it could take another two years for inflation in Australia to drop below 3%.

Erkan has chaired the central bank as it embarked on a 3,150 basis-point tightening cycle since June – including hikes of 500 basis points in the last three months – to cool demand and stem inflation, which is running near 62% and is expected to rise through May next year before dipping.

Erkan’s career spans Wall Street and U.S. corporate boardrooms, and her Ivy League education includes a financial engineering Ph.D. from Princeton.

She joined Goldman Sachs in 2005 as an associate and was named managing director in 2011.

She was at First Republic from 2014 to 2021 in roles that included president, board member and chief investment officer. She was seen as the heir apparent to the bank’s founder and longtime CEO, Jim Herbert, but abruptly resigned in December 2021.

This year, the San Francisco-based lender became the largest U.S. bank to fail since 2008 after it was seized by regulators and sold to JPMorgan.

Erkan was a director on the board of Marsh McLennan, a Fortune 500 firm, and was named CEO at Greystone, a real estate finance and investment firm, last year.

The Forbes list also features Denise Dresser and Lidiane Jones. Longtime Salesforce executive, Dresser was appointed CEO of Slack last month. Her predecessor, Jones, will take over as CEO of dating app Bumble in January.

Among others are Fei-Fei Li and Mira Murati.

Li is a co-director of Stanford’s Human-Centered AI Institute and the inventor of ImageNet, a database that has proven instrumental in training artificial intelligence systems to recognize images.

She’s long been considered a pioneer in machine learning.

Murati, in the course of one month, went from Open AI chief technology officer (CTO) to interim CEO to unemployed and then back to company CTO amid chaos over company leadership.

Lastly, the list features Reshma Saujani, a founder of Girls Who Code, which she set up in 2012 to grow the number of women in computer science. Over the last 11 years, the organization has educated more than 500,000 girls and women.

Saujani led the organization until 2021, after which she shifted her entrepreneurial energy toward advocating for better family leave and childcare policies in the U.S.

Source: Daily Sabah

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Turkey’s central bank asked some local lenders this week to step in and buy the country’s dollar bonds, the latest effort to provide a backstop to private markets as pressure builds before a presidential runoff election on Sunday.

Officials called some of the country’s banks on Monday and asked them to buy dollar bonds across multiple maturities in secondary markets, according to people familiar with the matter, who asked not to be named because they aren’t authorized to speak publicly. The central bank declined to comment.

The request, the people said, was aimed at keeping borrowing costs stable and also to fend off a spike in credit-default swaps — a measure of protection against potential credit events, such as default. The lenders were not given purchase targets, they said.

Authorities have intensified their interventions in markets to provide some stability ahead of the elections, the first round of which was held on May 14 and was inconclusive, with no candidate receiving the necessary 50% of the vote to win. The strategy has been costly, drawing down Turkey’s reserves and pushing foreign investors out of the market.

The latest move appears to have been successful, for now. Turkey’s five-year credit default swaps dropped to 663 basis points after surging to above 700 this week from 480 in the week before the vote. Dollar bonds across varying maturities also rallied, with the yield on the 2047 note, the country’s longest-maturity debt, dropping back below 10%. It had spiked from 8.18% just before the first-round vote.

In the currency markets, the lira has continued to weaken. It traded 0.2% lower at 11:20 a.m. in Istanbul on Thursday, falling to 19.9270, its weakest level ever on a closing basis. The lira has lost 6.1% of its value this year, and 34% since the beginning of 2022.

President Recep Tayyip Erdogan’s surprisingly strong showing in the first round vote — he won 49.5% — led to a selloff in Turkish assets as investors weighed the possibility of his unconventional economic policies continuing. Erdogan faces the opposition candidate Kemal Kilicdaroglu, who won 44.9% of the vote in the first round, on Sunday.

Turkey’s central bank will meet for a regularly scheduled interest-rate decision later on Thursday. All 21 participants in a Bloomberg survey expect the bank to hold its benchmark interest rate at 8.5%, the world’s most deeply negative real rate when compared to inflation, which last clocked in at 44% in April.

Source: Yahoo

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The Central Bank of Turkey kept its policy rate flat at the May meeting and concluded that the current rate is adequate to support the recovery from February’s earthquakes. It did not offer any signals about a policy change or provide renewed forward guidance.

At the first rate-setting meeting after the 14 May elections, the Turkish central bank kept its policy rate on hold at 8.50% in line with the market consensus and maintained its forward guidance that the current policy rate is adequate to support the recovery from the earthquakes earlier this year. Accordingly, the market’s reaction to the decision was muted, as $/TRY has been flat.

After the elections, the CBT took a tightening step and expanded the scope of the security maintenance requirements based on loan growth to include other commercial loans and consumer loans. But a few days later, this was reversed ahead of the election run-off, though “liraisation” regulations and news reports of increased controls over banks’ daily FX transactions have remained in place. In this environment, whether the CBT came up with any signal for a policy change or renewed forward guidance was quite important and closely watched by the market.

However, the CBT’s assessment this month was almost a carbon copy of the note shared after the April meeting:

• The bank has kept its assessment on the global economy completely unchanged, once again mentioning recession concerns due to a number of factors, including “conditions threatening financial stability”. Given this backdrop, financial markets are also shifting their expectations related to the end of tightening cycles in the near term.
• Regarding the domestic economic outlook, the CBT seems to be more positive with a faster-than-expected recovery in the earthquake region.
• It also kept the forward guidance unchanged while pointing out that “the effects of the earthquake in the first half of 2023 will be closely monitored”. The bank also restated the need to keep financial conditions supportive in response to the earthquakes and repeated its emphasis on alternative policy instruments and alignment of all policy instruments with “Liraisation” targets.

The consensus view points to the need for normalisation in the conduct of monetary policy given the narrowing room for muddling through with continued pressure on reserves, which have declined by $22.1bn on a year-to-date basis, standing at $105.1bn as of 12 May. In this regard, whether the new administration after the second round of the presidential elections will change/revise the new economy model will be a key issue for watchers of the Turkish economy.

Source: Intelli News

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