Turkey central bank governor quits and points to campaign against her

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Turkey’s central bank governor Hafize Gaye Erkan has resigned just months after the country embarked on a major overhaul of economic policy that has featured huge rises in interest rates. 

Erkan, who was appointed in June as the bank’s first female governor, said her resignation was for personal reasons, and the result of a “smear campaign” against her in the local media. 

The former Goldman Sachs banker was one of the main architects of a major shift towards more conventional economic policies that began in June and has slowly begun to draw foreign investors back to Turkey’s markets. Finance minister Mehmet Şimşek, who has led the economic turnaround efforts, said on Friday evening that the programme “continues without interruption and with determination”. 

“Our president has full support and confidence in our economic team and the programme we are implementing,” said Şimşek on Friday night. 

The central bank under Erkan has raised interest rates from 8.5 per cent in June to 45 per cent as the country has tried to quell a long-running inflation crisis. Turkish President Recep Tayyip Erdoğan, who once called high interest rates the “mother and father of all evil”, has appeared to back the rate rises. However, investors have been concerned since the overhaul began after Erdoğan’s election in May that he might abruptly change course. Turkey’s strongman leader has previously sacked central bank governors for raising interest rates. 

Erkan has faced significant criticism in some newspapers in recent weeks over claims that her father has been given an unofficial role at the central bank. She strenuously denies the allegations. 

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