Erdogan forms economic front; Wall Street veteran as central bank head
The Turkish leader aims to fulfill a campaign promise and tackle a record inflation rate.
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Turkish President Recep Tayyip Erdogan addresses the media after a cabinet meeting in Ankara, Turkey, December 20, 2021 (Reuters)
Turkish President Recep Tayyip Erdogan appoints a former Wall Street executive as head of the country's central bank, as he attempts to establish an economic front to spearhead Turkey's rocketing inflation rate.
Hafize Gaye Erkan, a former co-CEO of American First Republic Bank and managing director at international financial institution Goldman Sachs, will become the central bank's first woman governor.
During an interview for 24 TV in April ahead of the elections, Erdogan said, “We’re preparing to further strengthen our economic policies in the period ahead,” adding that "a team under the coordination of [former finance minister] Mehmet Simsek, who participated in the economy’s management for years, is making preparations to that end.”
Erdogan, who was recently re-elected for a third term, announced on Saturday the appointment of former Merrill Lynch economist, Mehmet Simsek, as finance minister.
Simsek formerly served as a finance minister and deputy prime minister in past governments ruled by Erdogan's AKP and is known for opposing the Turkish leader's economic policy to slash interest rates amid rising inflation.
During the term of former central bank chief Sahap Kavcioglu, the interest rate was lowered to 8.5 percent after being at 19 percent in 2021.
In May, the country's inflation rate dropped to under 40 percent, a 16-month low.
Erdogan began curring interest rates to keep investment cheaper and growth more possible, but after inflation started running wild by hitting an estimated 85% annual rate late last year, the president was keen on keeping interest rates low to attract more growth. Unfortunately, that came at the price of the Turkish lira which plummeted gravely.
The Turkish President unveiled his cabinet last Saturday.
President Erdogan announces Türkiye’s new cabinet:
— TRT World (@trtworld) June 3, 2023
- Cevdet Yilmaz, Vice President
- Hakan Fidan, Foreign Min.
- Yasar Guler, Defence Min.
- Ali Yerlikaya, Interior Min.
- Mehmet Simsek, Treasury & Finance Min.
- Yilmaz Tunc, Justice Min. pic.twitter.com/2LMdfYJU98
