Erdogan considering Erkan as Turkey cenbank chief, sources say

President Tayyip Erdogan is considering appointing Hafize Gaye Erkan, a senior finance executive in the United States, as governor of Turkey’s central bank, according to two senior officials with knowledge of the matter.

Erkan met with Mehmet Simsek, Turkey’s newly-appointed treasury and finance minister, in Ankara on Monday, one of the sources said. The two sources told Reuters she is set to meet Erdogan soon to discuss the possible role.

The meetings – just over a week after Erdogan won re-election – come as the government signals it is preparing a U-turn to more orthodox policies, including interest rate hikes, to address a cost-of-living crisis.

The second source said Erkan was one of “a few candidates” to succeed current bank chief Sahap Kavcioglu, who spearheaded Erdogan’s unorthodox policy of slashing rates since 2021 despite inflation soaring to a 24-year peak above 85% last year.

A former co-CEO at First Republic Bank and managing director at Goldman Sachs, Erkan could not be immediately reached for comment.

Erdogan’s office and the Treasury ministry did not comment on Erkan.

After he was appointed to cabinet over the weekend, Simsek said the country has no choice but to return to “rational ground” to ensure predictability in the economy.

Turkey’s policy rate was slashed to 8.5% from 19% in 2021, setting off a historic currency crash in late 2021. The policy has left real rates deeply negative and the lira largely managed by dozens of regulations covering credit and foreign exchange.

Erkan’s policy leanings are unclear given she has no formal monetary policy experience in her career spanning Wall Street and U.S. corporate boardrooms, and her Ivy League education including a financial engineering Ph.D. from Princeton.