Erkan, Turkey’s first female central bank chief, was a former managing director at Goldman Sachs and co-CEO at First Republic Bank.

She is also Turkey’s fifth central bank governor in four years.

Her appointment, alongside new economy minister Mehmet Simsek’s, could be a sign that Turkey’s monetary policy will normalize following years of ultra-low borrowing costs and soaring inflation, analysts say.

“Given her training at Princeton and her top-level experience in the U.S. banking sector, I assume that the new governor will return to orthodox policies,” Selva Demiralp, a professor of economics at Koç University in Istanbul, told CNBC in an e-mail.

The caveat would lie in how much autonomy the central bank could exercise, and to what extent —something that Demiralp says investors will have to wait and see.

That verdict could come as soon as two weeks when the central bank convenes for an interest rate decision meeting.

Demiralp expects a rate hike in the next central bank meeting, “taking the policy rate to a level of around 25 percent or higher could be a good first step,” she said.

Over the weekend, Turkish President Recep Tayyip Erdogan appointed former economy chief Simsek as the new treasury and economy minister. He was known for his market friendly policies.

Timothy Ash, senior emerging markets sovereign strategist from BlueBay Asset Management, told CNBC that “markets will be doubly pleased” by Erkan’s appointment as central bank chief.

He said both Erkan and Simsek will make a “top notch team.”

Erkan’s predecessor Sahap Kavcioglu was named head of the Banking Regulation and Supervision Agency (BRSA), according to the Official Gazette.

“Simsek and Erkan will be judged on monetary policy moves, inflation and lira. Guess Erdogan saw some use in keeping Kavcioglu in the wings,” Ash said in a tweet.

“Appointment of Kavcioglu at BRSA has complicated things for Simsek,” Ash said in another tweet, adding that markets will focus on whether the Simsek-Erkan partnership can deliver policy tightening sufficient to save the freefalling lira.

Erdogan had fired Kavcioglu’s predecessor Naci Agbal in March 2021, two days after the central bank raised interest rates.

The Turkish lira has been extending its plunge since the reelection of Erdogan, and last traded at 23.47 against the dollar.

The country’s annual inflation rate for May recorded a figure of 39.59%. Last October, Turkey’s inflation rate soared to a lofty level of 85.51%.

Source: CNBC

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Erkan becomes the first woman to head the institution after being appointed by Turkish President Recep Tayyip Erdogan.

The 41-year-old has had a stellar career in the US corporate world with stints in financial services, banking, investment, risk management, technology and digital innovation, but little is known about Erkan in her home country.

Erkan was born in Istanbul in 1982 to an engineer father and a mother who taught mathematics and physics. She attended one of the top state schools in Turkey, Istanbul High School, and graduated second in her class.

She studied industrial engineering at Bogazici University, one of the most prestigious universities in Turkey, and went on to earn a doctorate in operations research and financial engineering from Princeton University in the United States in 2006.

Erkan later completed business programmes at Harvard Business School and the Stanford Graduate School of Business in 2015 and 2016, respectively.

Corporate career

Erkan joined the global investment bank Goldman Sachs as an associate in 2005, and by 2011, she had been named managing director.

She joined First Republic Bank in 2014, where she became co-chief executive officer in 2021.

In 2018, she was named to the 40 Under 40 lists by Crain New York Business and the San Francisco Business Times, which noted that Erkan was the only woman under 40 holding a president or CEO title at one of the 100 largest US banks.

Erkan is a supporter of the National Coalition of Girls’ Schools, with which she recently founded the Hafize Gaye Erkan First Republic Fellowship Program for young women and girls.

In June 2022, Erkan was appointed chief executive officer of Greystone, a New York-based real estate finance and investment company.

Last week, Erdogan named Mehmet Simsek, an advocate of orthodox economy policies, as Turkey’s treasury and finance minister. The appointment suggested a retreat from what is widely considered Erdogan’s unorthodox economic policies, including the belief that raising interest rates increases inflation.

Source: ALJAZEERA

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