Under Erkan, 44, Turkey’s central bank raised its key interest rate to 45 percent from 8.5 percent to curb inflation, which is by far the highest in Europe in Turkey, Reuters reported.
Erkan was appointed by President Recep Tayyip Erdogan, who has long fought against interest rate hikes that have led to a sharp rise in prices and an exodus of investors. By appointing Erkanová, he made a 180-degree turn, the agency recalled.
But a few weeks ago, according to the daily Hürriyet, a scandal began to weigh on Erkanova, which broke out after some media accused her of allegedly allowing her father to interfere in the personnel policy of the central bank. One former employee of the bank claimed that the governor’s father “had her fired” and is seeking the departure of other employees.
In addition, she reportedly angered President Erdogan when she admitted last month that she had to move in with her parents because inflation made the rent in her Istanbul apartment so high that even she could not afford it.
The Turkish central bank raised the interest rate to 30 percent
The governor said on Friday that she was resigning also because of the smear campaign against her person. He says he wants to protect his family, including his child. Turkey’s finance ministry said the resignation was Erkan’s “personal” decision.
The Turkish lira weakened after the news of the governor’s resignation. Since June, when the president appointed Erkanova to the head of the central bank and Mehmet Şimşek to the head of the finance ministry in order to attract foreign investors to Turkey by changing the economic policy, the Turkish currency has weakened by about 23 percent against the dollar. Year-on-year inflation was 65 percent in December.
Finance Minister Mehmet Şimşek said economic policy under his leadership would continue without interruption. He added that the new governor of the central bank will be appointed on his proposal.