Tim Ash:  Erkan clears out and cleans up the CBRT

I will take my lead from a U.S. investment bank report this morning on recent HR changes at the CBRT, when they described them as “massively positive”.


I, we, refer here to the publication in the official gazette late last night of a decree which saw Cevdet Akcay, Hatice Karahan and Fatih Karahan appointed to the board of the central bank, and the MPC. This follows the prior hire of the first women as central bank governor of Turkey, Hafize Gaye Erkan.


All three new board hires are respected, orthodox economists, all PhDs. Cevdet is a former chief economist from Yapi Kredi Bank, and a proper professor of economics. He is an energetic, outspoken out of the box but orthodox economic thinker. He is well known to the market and trusted. Hatice has a PhD from Colombia University, and worked as a former adviser to Erdogan, but was one of the rational, orthodox advisers and is again well known to the market and is trusted. Fatih Karahan has a PhD from University of Philadelphia as well but worked at the NY Fed specialising in labour and market studies but within the monetary research division, and worked also as a economist at Amazon prior to hire. Again an orthodox thinker with a great CV.


Can it get any better than this?


Perhaps as significant as those being hired into the CBRT are those leaving, including three deputy governors, amongst them Emrah Sener, known to be an architect of some of the more unorthodox monetary policies rolled out by the CBRT to align with the views of Erdogan.

How to read all this?


How can a known unorthodox adherent as Erdogan first hire an orthodox thinker, in Hafize Gaye Erkan, as governor of the CBRT and then back her with the appointment of a similarly unorthodox team around her?


Well my read is this is a massive vote of support for Simsek, and Erkan, and I think recognition in the presidential administration, and his now closest advisers in the family, that needs must and the prior economic policies had taken Turkey to the brink of a systemic economic crisis. There had to be a policy reversal, Erdogan was convinced of this by his new crew of advisers around him to change, and we are seeing the roll out, albeit initially gradually, of more orthodox policies.

I do think here this is bigger, it is about the succession and Erdogan thinking about eventually passing the baton to others, likely in the family, to take on the political challenge. This will likely increasingly be seen after the local elections next March when we see yet more delegation. But I think the fact that Erdogan is now trusting the likes of the Bayraktars, known to be technocratic and meritocratic, and demonstrating this with the hires to the MOF around Simsek and the CBRT, is evidence of this. It is an acknowledgement that the new group of advisers around Erdogan, who are technocratic, and more orthodox in view, are perhaps finally telling truth to power, and might actually be right.



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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.