Turkish President Recep Tayyip Erdoğan made some of the biggest moves in revamping his economic team by installing three new central bankers that include a former adviser at the Federal Reserve Bank of New York, Bloomberg reported.
Fatih Karahan, Cevdet Akçay and Hatice Karahan will serve as deputies to Governor Hafize Gaye Erkan, a former Wall Street banker appointed last month. They’ll replace Emrah Şener, Taha Çakmak and Mustafa Duman on the Monetary Policy Committee, according to a decision published in the Official Gazette early on Friday.
Timothy Ash, a strategist at BlueBay Asset Management, said the appointment of the three represented a “180 degree turn” by Erdoğan as they replaced less orthodox thinkers.
“This is a big positive. Cevdet Akcay is a superb economist and thinker. Hatice Karahan is excellent. Fatih Karahan is from the NY Fed. This a a sea change at the Turkish central bank. Massive vote of confidence in Erkan from Erdogan,” he tweeted.
The appointments came a day after the central bank more than doubled its year-end inflation forecast to 58 percent as Erkan vowed to keep raising interest rates after years of controversial policies.
Since Erkan took office, the central bank has increased interest rates twice as it pivots away from Erdoğan’s unorthodox policy of cutting borrowing costs to fight inflation.
She said on Thursday at her first press conference since her appointment last month that more hikes were coming.
The lira stood at 26.9560 against the dollar on Friday morning, unchanged from Thursday’s closing level. It has lost 30 percent of its value this year.