2023-06-09 10:47:47
Turkish President Recep Tayyip Erdogan appointed by decree on June 9 a new governor at the head of the Turkish Central Bank, whose mission will be to stem inflation and the devaluation of the Turkish lira.
Hafize Gaye Erkan, who worked for First Republic Bank and Goldman Sachs, is in favor of a return to financial orthodoxy, such as raising interest rates to fight once morest inflation. She becomes the first woman to head the Turkish Central Bank.
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This holder of a doctorate from the prestigious American university of Princeton spent eight years and ended up managing director of First Republic Bank, following nine years at Goldman Sachs.
President Erdogan, re-elected on May 28 for a third term, had already appointed a new economy minister last week, Mehmet Simsek, who also promotes a return to orthodoxy. When taking office on Sunday, the minister, highly respected in business circles, warned that it would be necessary to return to “rational measures” to restore the Turkish economy.
Almost 40% inflation
Recep Tayyip Erdogan has forced the Turkish Central Bank to lower interest rates in recent years, contributing to soaring inflation (39.6% on one year in May). Contrary to classic economic theories, the Turkish head of state believes that high interest rates promote inflation. President Erdogan’s heterodox policy has also contributed to the fall of the Turkish lira, which has lost almost 80% of its value once morest the dollar in five years.
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On June 7, the Turkish currency, massively supported by the Turkish Central Bank before the presidential and legislative elections in May, fell by more than 7% once morest the dollar and the euro. The Turkish lira continued to retreat 1.5% shortly following 06:30 GMT on June 9 once morest the greenback. The Turkish Central Bank will announce its new key rate on 22 June.
(with AFP)
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