Turkey's Erdogan picks Wall Street vet to head central bank

Turkey's newly re-elected President Recep Tayyip Erdogan has appointed a former Wall Street executive to head the country's central bank, a potential shift to more orthodox economic policies after years of high inflation and a plummeting lira.

Erdogan named Hafize Gaye Erkan as the central bank's new governor in the Official Gazette on Friday.

The Princeton-educated Erkan was a managing director at Goldman Sachs and later worked at the now-failed San Francisco-based First Republic Bank, holding the post of co-CEO for six months in 2021.

During her stint on Wall Street, Erkan gained a reputation for being "tough, smart, and effective," according to Kathryn Wylde, CEO of the Partnership for New York City nonprofit where Erkan once served as a director.

She is now also the first woman to head Turkey's central bank.

Analysts eye return to economic orthodoxy

Erdogan unveiled his new cabinet last Saturday which also included Mehmet Simsek, an internationally-renowned former Merrill Lynch economist who has been known to oppose Erdogan's economic policies, as finance minister.

The appointments of Erkan and Simsek into top financial positions are seen by many analysts as an indication that Erdogan is moving to abandon policies that have previously been branded as "unorthodox."

Erdogan won a third presidential term last month amid a cost-of-living crisis fueled by inflation, which peaked at a staggering 85% in October.

Critics blame the turmoil on Erdogan's policy of lowering interest rates to promote growth, which runs contrary to conventional economic wisdom.

After the lira again plunged on Wednesday, Simsek said on Twitter that "our immediate priority is to strengthen our team and design a credible program."

"As we navigate through domestic and international challenges, we affirm our commitment to rules based policy making to enhance predictability," the new finance minister added.

"While there are no short cuts or quick fixes, rest assured that our experience, knowledge and dedication will help us overcome potential impediments ahead."