Erdogan Names Erkan to Head Türkiye Central Bank

Hafize Gaye Erkan. Photo: Bloomberg
Hafize Gaye Erkan. Photo: Bloomberg
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Erdogan Names Erkan to Head Türkiye Central Bank

Hafize Gaye Erkan. Photo: Bloomberg
Hafize Gaye Erkan. Photo: Bloomberg

President Tayyip Erdogan on Friday appointed Hafize Gaye Erkan, a finance executive in the United States, to head Türkiye's central bank as it prepares to reverse course and tighten policy after years of rate cuts and a simmering cost-of-living crisis.

Erkan, former co-CEO at First Republic Bank and managing director at Goldman Sachs, takes the reins after Erdogan's re-election on May 28 and just under a week after he signaled a pivot away from unorthodoxy with a new cabinet.

The fifth central bank chief in four years, the 43-year-old replaces Sahap Kavcioglu, who spearheaded Erdogan's rate-cutting drive that set off a historic currency crash in 2021 and sent inflation to a 24-year peak above 85% last year.

The announcement of Erkan's appointment in the Official Gazette was accompanied by a decision to appoint Kavcioglu as head of the country's BDDK banking watchdog.

Erkan's leanings are unclear given she has no formal monetary policy experience in her career spanning Wall Street and US corporate boardrooms. She has a Ph.D. from Princeton University in financial engineering.

She was at First Republic from 2014-2021, according to her LinkedIn profile. This year, it became the largest US bank to fail since 2008 after it was seized by regulators and sold to JPMorgan.

Türkiye 's central bank has had its independence all but stamped out in recent years by Erdogan. A self-proclaimed "enemy" of interest rates, he pressed it to deliver stimulus and was quick to replace governors.

The policy rate was slashed to 8.5% from 19% in 2021, leaving real rates deeply negative and the lira largely managed by dozens of regulations covering credit and foreign exchange. Yet after Erdogan survived his toughest political test in the May 28 runoff vote, he on Saturday named Mehmet Simsek, a well-respected and orthodox former finance minister, as minister in charge of the economy.

Amid record low foreign reserves of -$5.7 billion, the lira has hit all-time lows this week, plunging 7.2% on Wednesday, and traded at 23.5010 against the dollar after Erkan's appointment.

According to Reuters, analysts said the return of Simsek and the appointment of Erkan set the stage for rate hikes, which could reattract foreign investors after an exodus in recent years.

The apparent U-turn on the economy comes as many analysts anticipate turmoil given depleted foreign reserves, unchecked inflation and wide current account deficits.

The economy's prospects depend on how much independence Erdogan grants Erkan and Simsek, analysts said. In the past, he has embraced orthodoxy, only to quickly double back.

The last central bank governor to raise rates, Naci Agbal, was fired in 2021 after less than five months on the job.

"It is unclear for how long Erdogan may tolerate a more pragmatic stance on the economic front, given the priority he assigns to the March 2024 local elections," said Wolfango Piccoli of Teneo. The ruling AK Party aims to recapture big cities from opposition control in those elections.

Erkan is on Marsh McLennan's board and was named CEO at Greystone, a real estate finance and investment firm, last year.

During her career in New York City, she gained a reputation as "tough, smart, and effective," said Kathryn Wylde, CEO of the Partnership for New York City nonprofit, where Erkan once served as a director.



Harris, Trump Offer Starkly Different Visions on Climate Change and Energy

Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo)
Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo)
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Harris, Trump Offer Starkly Different Visions on Climate Change and Energy

Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo)
Democratic vice presidential candidate Sen. Kamala Harris, D-Calif., speaks during a debate, Oct. 7, 2020, in Salt Lake City, left, and Republican presidential candidate former President Donald Trump speaks during a debate, June 27, 2024, in Atlanta. (AP Photo)

As the Earth sizzled through a summer with four of the hottest days ever measured, Vice President Kamala Harris and former President Donald Trump have starkly different visions on how to address a changing climate while ensuring a reliable energy supply. But neither has provided many details on how they would get there.

During her acceptance speech at the Democratic National Convention, Harris briefly mentioned climate change as she outlined “fundamental freedoms” at stake in the election, including “the freedom to breathe clean air and drink clean water and live free from the pollution that fuels the climate crisis.”

As vice president, Harris cast the tie-breaking vote on the Inflation Reduction Act, President Joe Biden’s landmark climate law that was approved with only Democratic support. As a senator from California, she was an early sponsor of the Green New Deal, a sweeping series of proposals meant to swiftly move the US to fully green energy that is championed by the Democratic Party’s most progressive wing.

Trump, meanwhile, led chants of “drill, baby, drill” and pledged to dismantle the Biden administration’s “green new scam” in his acceptance speech at the Republican National Convention. He has vowed to boost production of fossil fuels such as oil, natural gas and coal and repeal key parts of the 2022 climate law.

“We have more liquid gold under our feet than any other country by far,” Trump said at the RNC, The AP reported. “We are a nation that has the opportunity to make an absolute fortune with its energy.”

‘Climate champion’ or unfair regulations? Environmental groups, who largely back Harris, call her a “proven climate champion” who will take on Big Oil and build on Biden's climate legacy, including policies that boost electric vehicles and limit planet-warming pollution from coal-fired power plants.

"We won’t go back to a climate denier in the Oval Office,'' said Lena Moffitt, executive director of Evergreen Action.

Republicans counter that Biden and Harris have spent four years adopting “punishing regulations” that target American energy while lavishing generous tax credits for electric vehicles and other green priorities that cost taxpayers billions of dollars.

“This onslaught of overreaching and outrageous climate rules will shut down power plants and increase energy costs for families across the country,'' said Sen. John Barrasso, R-Wyo. "Republicans will work to stop them and fight for solutions that protect our air and water and allow our economy to grow.”

Democrats have a clear edge on the issue. More than half of US adults say they trust Harris “a lot” or “some” when it comes to addressing climate change, according to an AP-NORC poll conducted in July. About 7 in 10 say they have “not much” trust in Trump or “none at all” when it comes to climate. Fewer than half say they lack trust in Harris.

A look at where the two candidates stand on key climate and energy issues:

Fracking and offshore drilling Harris said during her short-lived 2020 presidential campaign that she opposed offshore drilling for oil and hydraulic fracturing, an oil and gas extraction process better known as fracking.

But her campaign has clarified that she no longer supports a ban on fracking, a common drilling practice that is crucial to the economy in Pennsylvania, a key swing state and the nation’s second-largest producer of natural gas.

“As vice president, I did not ban fracking. As president, I will not ban fracking,'' Harris told CNN Thursday in her first major television interview as the Democratic nominee. "We can grow ... a thriving clean energy economy without banning fracking.''

Kevin Book, managing director at ClearView Energy Partners, a Washington research firm, said Harris’ evolving views show she is “trying to balance climate voters and industry supporters,″ even as her campaign takes ”an adversarial stance″ with the oil and gas industry overall.

Harris and Democrats have cited new rules — authorized by the climate law — to increase royalties that oil and gas companies pay to drill or mine on public lands. She also has supported efforts to clean up old drilling sites and cap abandoned wells that often spew methane and other pollutants.

Trump, who pushed to roll back scores of environmental laws as president, says his goal is for the US to have the cheapest energy and electricity in the world. He’d increase oil drilling on public lands, offer tax breaks to oil, gas and coal producers and speed the approval of natural gas pipelines.

Electric vehicles Trump has frequently criticized tough new vehicle emissions rules imposed by Biden, incorrectly calling them an electric vehicle “mandate.″ Environmental Protection Agency rules issued this spring target tailpipe emissions from cars and trucks and encourage — but do not require — sales of new EVs to meet the new standards.

Trump has said EV manufacturing will destroy jobs in the auto industry. In recent months, however, he has softened his rhetoric, saying he’s for “a very small slice” of cars being electric.

The change comes after Tesla CEO Elon Musk “endorsed me very strongly,” Trump said at an August rally in Atlanta. Even so, industry officials expect Trump to roll back Biden’s EV push and attempt to repeal tax incentives that Trump claims benefit China.

Harris has not announced an EV plan but has strongly supported EVs as vice president. At a 2022 event in Seattle, she celebrated roughly $1 billion in federal grants to purchase about 2,500 “clean” school buses. As many as 25 million children ride the familiar yellow buses each school day, and they will have a healthier future with a cleaner fleet, Harris said.

The grants and other federal climate programs not only are aimed at “saving our children, but for them, saving our planet,″ she said.

Climate law, jobs Harris has focused on implementing the $1 trillion bipartisan infrastructure law passed in 2021, as well as climate provisions of the Inflation Reduction Act, which provided nearly $375 billion in financial incentives for electric cars, clean energy projects and manufacturing.

Under Biden and Harris, American manufacturers created more than 250,000 energy jobs last year, the Energy Department said, with clean energy accounting for more than half of those jobs.

Trump and his running mate, Ohio Sen. JD Vance, deride climate spending as a "money grab'' for environmental groups and say it will ship Americans' jobs to China and other countries while increasing energy prices at home.

“Kamala Harris cares more about climate change than about inflation,” Vance wrote in an op-ed in The Wall Street Journal.

Goodbye Paris? Trump, who has cast climate change as a “hoax," withdrew the US from the 2015 Paris Climate Agreement. He has vowed to do so again, calling the global plan to reduce carbon emissions unenforceable and a gift to China and other big polluters. Trump vows to end wind subsidies included in the climate law and eliminate regulations imposed and proposed by the Biden administration to increase the energy efficiency of lightbulbs, stoves, dishwashers and shower heads.

Harris has called the Paris Agreement crucial to address climate change and protect “our children’s future.″

The US returned to the Paris Agreement soon after Biden took office in 2021.

LNG pause After approving numerous projects to export liquefied natural gas, or LNG, the Biden administration in January paused consideration of new natural gas export terminals. The delay allows officials to review the economic and climate impacts of natural gas, a fossil fuel that emits methane, a potent greenhouse gas.

The decision aligned the Democratic president with environmentalists who fear the recent increase in LNG exports is locking in potentially catastrophic planet-warming emissions even as Biden has pledged to cut climate pollution in half by 2030.

Trump has said he would approve terminals “on my very first day back” in office.

Harris has not outlined plans for LNG exports, but analysts expect her to impose tough climate standards on export projects as part of her larger stance against large oil and gas companies.