The first woman governor of Türkiye’s Central Bank, Hafize Gaye Erkan, has stepped down from her role just shy of eight months after her appointment on 8 June 2023. She has been replaced by her
Erkan announced her resignation on Friday in a message on X (formerly Twitter), stating she had been subjected to “a major reputation assassination campaign” and that she had decided to quit her job “In order to prevent my family and my innocent child, who is not even one and a half years old, from being further affected by this”.
Her post stated that the “economic programme” initiated on her watch “has started to bear fruit”, pointing to the “increase in our reserves, economic data and indicators of the main trend of inflation” as the “proof of this success”.
She thanked Finance Minister Mehmet Şimşek and President Recep Tayyip Erdoğan for their unwavering support, and for giving her “the opportunity to serve my country and nation, which is the greatest legacy I will leave to my children.”
Also writing on X, Türkiye’s Finance Minister Mehmet Şimşek said that “The decision made by the former President of the Central Bank, Mrs. Hafize Gaye Erkan, is entirely personal and at her own discretion. We respect her decision and are grateful for her service.”
“Under the leadership of President Recep Tayyip Erdoğan, our economic program continues seamlessly and with a strong determination,” the Finance Minister added.
Without naming him, Şimşek described the new Governor as “a well-respected macroeconomist with an extraordinary depth of knowledge and expertise” who “will be appointed in line with my recommendation.”
The decision made by the former President of the Central Bank, Mrs. Hafize Gaye Erkan, is entirely personal and at her own discretion. We respect her decision and are grateful for her service.
The new Governor, who is a well respected macroeconomist with an extraordinary depth…
— Mehmet Simsek (@memetsimsek) February 2, 2024
Allegations about Hafize Gaye Erkan’s father
Erkan, who is a former co-CEO at First Republic Bank and managing director at Goldman Sachs, had been on the receiving end of bad press after a former Central Bank employee made allegations about the behaviour of her father Erol Erkan.
In a formal complaint, Büşra Bozkurt accused Mr Erkan, who is not an employee of the Bank yet was apparently allocated a room there, of telling her and her colleagues to work longer hours than she was contractually obliged to do. Ms Bozkurt claims she was fired for refusing. In her complaint, she also claimed Mr Erkan had slapped a fellow Central Bank employee.
The allegations made headline news in Turkiye, leading to widespread speculation about the influence of Hafize Gaye Erkan’s father at the Bank.
Without explicitly naming Erkan, President Erdoğan tried to check the rumours circulating on Wednesday by claiming opposition forces were trying to undermine the economic progress the country was making.
“When the Central Bank’s reserves reached a record-breaking $145.5 billion, they [the Opposition] took immediate action. They launched campaigns to disrupt the climate of confidence and stability in our economy with unreasonable rumours, which could undermine the progress we have made,” President Erdoğan said.
The president’s comments were not enough to save Hafize Gaye Erkan, who resigned two days later. Erkan’s successor was named as Fatih Karahan, who formerly starts as Governor today, 3 February having served as the Central Bank’s Deputy Governor since July 2023.
About the new Governor Fatih Caravan
Born in Eskişehir in 1982, Fatih Karahan graduated from Boğaziçi University’s Department of Mathematics and Industrial Engineering in 2006. He completed his Master’s, followed by his Doctorate in economics at the University of Pennsylvania in 2012.
Karahan took up a position as an economist at the Federal Reserve Bank of New York in 2012, where he was a monetary policy advisor and the Head of Labour and Product Market Studies until 2022.
He has also worked as a part-time lecturer at Columbia University and New York University.
In 2022, Karahan became a senior economist at Amazon, and by November 2022 he was appointed the firm’s Chief Economist.
Taking over the role of Hafize Gaye Erkan, Karahan becomes the Central Bank of the Republic of Turkiye’s sixth governor in the past five years. Unlike in previous cases where the departures of the Central Bank heads were due to their differences over fiscal policy with the Turkish President, Karahan’s appointment means the policies initiated by Erkan are likely to continue.
