• Robin Egg

  Economics Editor

• Mitra Nizar

  Türkiye Correspondent

With the election of the youngest-ever central bank chief, re-elected Turkish President Recep Tayyip Erdogan appears to want to put a fresh spin on his economic policy in the country. While Türkiye suffers from hyperinflation, the value of the lira has evaporated to zero. Attempts to prop up the economy by lowering the high interest rate from 19 percent to 8.5 percent have had little effect so far.

Now 43-year-old Hafiza Gay Erkan has to figure out how to get the country out of this monetary quagmire. And that is exactly what the first woman in this position should do in an aging world such as the financial sector, as Turkey has become more conservative under Erdogan’s rule. Still, she seems like the perfect candidate in every way: a newcomer from overseas with a flawless resume.

Unbridled inflation in Türkiye and the lira rate:

At the prestigious Princeton University, Erkan once had a V.V Financial engineering. This is the discipline of developing new financial products. At the age of 26, Ercan received a private scholarship to study at Princeton University, which is awarded to only two brilliant minds each year. After completing two years of study in just one year, the Turkish student was still studying at Harvard University before joining Goldman Sachs in 2005.

However, her resume is not entirely flawless: since 2014, Erkan has been working at First Republic Bank from San Francisco. I got to the executive vice president of the mid-sized bank, where many tech industry leaders put their money, like Facebook founder Mark Zuckerberg. According to a profile in Turkey’s Hurriyet newspaper, Erkan was instrumental in increasing First Republic Bank’s funds tenfold during her eight years there.

Special products, such as a large mortgage portfolio, killed the bank at the beginning of May. After a panic broke out and wealthy customers quickly took their money, First Republic Bank collapsed. JPMorgan Chase eventually took over the bankrupt bank.

While Erkan’s position at First Republic Bank is now raising questions, it hasn’t stopped Erdogan and his new finance minister, Mehmet Simsek, from taking risks with her.

Simsek, a former economist at the US bank Merrill Lynch, hinted almost immediately that he did not want to go along with Erdogan’s economic opportunism. He said he only wanted to fight inflation “on rational grounds”.

In recent years, Erdogan has repeatedly forced the central bank to cut interest rates to boost the economy, while economists want to fight inflation with higher interest rates. In 2019, the president sacked the head of the Central Bank, Murat Çetinkaya, for allegedly refusing to cut interest rates.

A look back from Neosur on Erdogan’s victory: