Turkish Central Bank Governor resigns months into her tenure after claims of improper use of power

AP , Saturday 3 Feb 2024

The governor of Turkey’s central bank has resigned only months after taking office amid allegations of improper use of power and family interference in the workings of the financial institutions.

Governor of the Central Bank of Turkey Hafize Gaye Erkan poses for a photograph at her office in Ank
Governor of the Central Bank of Turkey Hafize Gaye Erkan poses for a photograph at her office in Ankara. AP


Hafize Gaye Erkan who took over as central bank governor in June was the bank’s first female chief. She announced her resignation on social media platform X, formerly Twitter, late Friday, saying she was a victim of a “character assassination campaign” and would resign to spare her family further anguish.

Last month, a leading Turkish newspaper claimed that her parents were exerting undue influence inside the financial institution and that her father had even fired a bank employee. Allegations Erkan has vehemently refuted. At the time, President Recep Tayyip Erdogan came out in support of the central bank governor, dismissing the media report as “irrational rumors designed to destroy the climate of trust and stability in the economy that we have achieved through great difficulty.” The Turkish president had previous governors fired for resisting his insistence that lower interest rates would fight Turkey’s staggering inflation. Economists have blamed his unconventional economic policy that led to a major spike in the cost of living, with people struggling to afford food, housing and other necessities. However Erdogan reversed course after winning elections in May, appointing a new economic team headed by former Merrill Lynch banker Mehmet Simsek, who returned as finance minister and who brought on Erkan as the new governor. Under Erkan’s tenure, loan rates increased from 8.5% to the current 45%, the latest spike enforced last week.

Simsek wrote on X Saturday that Erkan's resignation was entirely her decision and thanked her for her service.

Fatih Karahan, the previous deputy governor of the central bank, will replace Erkan, according to the country’s official gazette.

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