On February 2nd, 2024, Hafize Gaye Erkan, the Governor of the Turkish Central Bank, tendered her resignation marking the culmination of her eight-month tenure. Her departure, distinguished for being the first female leader amidst a succession of five governors in as many years, highlights the unsettled landscape within the Central Bank of Türkiye.
The Central Bank of The Republic of Türkiye was established against the historical backdrop of the Ottoman Empire. It was initially tasked with regulating monetary as well as credit dynamics, alongside managing precious metal reserves and facilitating domestic or international transactions. Its role has continually adapted to meet contemporary exigencies. Some recent governors were Murat Uysal, Naci Agbal, Sahap Kavcioglu and Hafize Gaye Erkan before the new governor Fatih Karahan. In the face of economic challenges due to the Turkish Lira's consistent devaluation, maintaining a stable economic status and Gross Domestic Product (GDP) has become overly crucial. The need for experienced and knowledgeable leaders at the helm is vital.
Let's now talk about who Hafize Gaye Erkan was. She was born in 1979 in Elazığ. With an illustrious academic background, including achievements at prestigious institutions firstly Boğaziçi University then Princeton University, her participation in leadership programs at Stanford and Harvard, she has been working for several different prestigious companies for high positions since 2005. She came back to Türkiye as the governor of the Central Bank on June 8th 2023.
Erkan undertook some actions to enhance Türkiye’s economic status. She raised the interest rate from 8.5% to 45% to spur growth and combat inflation. Additionally, she promoted saving in Turkish Lira instead of foreign currencies like the US Dollar or gold. Pimco's decision to borrow in Turkish lira and express optimism about Türkiye’s future credit rating for the next five ears signaled renewed investor confidence, despite previous foreign investor apprehension due to political uncertainty. The increase in gross foreign exchange reserves from $45 billion to $85 billion by the end of 2023 further buoyed optimism about Türkiye’s economic prospects.
The reason for Hafize Gaye Erkan's resignation was declared to be protecting herself and her family. In a statement on her social media account at X, she stated, "As the public is aware, a significant reputation assassination campaign has been organized against me recently. In order to minimize the impact on my family and, more importantly, my innocent child who has not even reached one and a half years old yet, I hereby request my resignation from the honorable duty I have been carrying out since the first day, from our esteemed President.". However, there are many different allegations as well. Because on the Legal Gazette, it was written that she was dismissed. This created question marks in people’s head, making them question whether her resignation has a different reason or did she really resigned. Erkan was forced to resign due to conflicts between her and Mehmet Şimşek according to the leaders of Republican People’s Party, the main opposition party of Türkiye. Additionally, many other politicians indicated that her resignation is not surprising, contributing to the allegations about her resignation.
The new governor, Fatih Karahan, was introduced by the Minister of Finance of Türkiye, Mehmet Simsek as "a well-respected macroeconomist with an extraordinary depth of knowledge and expertise." He graduated from the University of Pennsylvania with a PhD in Economics and taught at esteemed schools including New York University and Columbia University. Additionally, he worked at Amazon as an economist and at the New York Central Bank. Since 2023, he has been working as the Vice President at the Central Bank.
All in all, even though we encounter changes in the Central Bank frequently, what will happen in the future is a matter of curiosity. The former woman governor, Hafize Gaye Erkan, worked for the welfare of Turkish citizens during her tenure of 8 months.
Works Cited
Oksijen, Gazete. “Hafize Gaye Erkan’ın Ekonomik Revizyondaki Rolü: Başkanlık Değişimi Yabancı Yatırımcılar İçin Ne Anlama Geliyor?”. Accessed 6 Feb. 2024.
“TCMB - Our History.”. Accessed 6 Feb. 2024.
Karakaş, Burcu. “Turkey central bank chief quits, citing need to protect her family.” Reuters, 3 Feb, 2024. Accessed 6 Feb. 2024.
“TCMB - Dr. Fatih Karahan.”. Accessed 7 Feb. 2024.
Hubbard, Ben. “Turkey’s Central Bank Chief Steps Down amid Long Inflation Battle.”
The New York Times, 3 Feb. 2024. Accessed 6 Feb. 2024.
Merkezi, Haber. “Hafize Gaye Erkan Istifa Mı Etti, Görevden Mi Alındı?” Medyascope, 3 Feb. 2024,. Accessed 11 Feb. 2024.
Oksijen, Gazete. “Muhalefetten Hafize Gaye Erkan’ın Istifasına Tepkiler” 2 Feb. 2024. Accessed 11 Feb. 2024.