Erdogan’s new central bank chief signals hope for Turkey’s economic turnaround

June 9, 2023  -ANKARA, Turkey (AP) — Turkish President Recep Tayyip Erdogan appointed a former U.S.-based bank executive to head the central bank Friday, sending the strongest signal yet that the newly reelected leader might pivot from his unusual economic policies that many blame for worsening a cost-of-living crisis.

Hafize Gaye Erkan, 41, is Princeton-educated and will become the first woman to lead the Turkish central bank. She briefly served in 2021 as co-chief executive of First Republic Bank, which last month became the second-largest U.S. bank to fail as its wealthy clients pulled their money during wider turmoil in the sector.

Her nomination follows last week’s appointment of Mehmet Simsek, an internationally respected former banker, as treasury and finance minister. He was a former finance and deputy prime minister under Erdogan and returned after a five-year break from politics.

The choices for two key financial roles have raised hopes that Erdogan, reelected last month to a third term, will move away from his insistence that lower interest rates will fight Turkey’s staggering inflation. The rate peaked at 85% in October, and people are struggling to afford food, housing and other necessities.