In a plot twist that would make most central bankers clutch their spreadsheets in dismay, Turkey’s President Recep Tayyip Erdoğan has appointed Fatih Karahan as the new governor of the Turkish central bank, marking what some might call the latest episode in his long-running drama series, “How I Learned to Stop Worrying and Love Inflation.”
Former governor Hafize Gaye Erkan stepped down after a ten-month tenure described by some economists as “brisk,” and by others as “a speedrun through monetary policy in hard mode.” Her resignation followed allegations of nepotism and a reportedly problematic approach to managing internal affairs, which in Turkey’s economic circles is apparently becoming as common as kebabs at a street market.
Karahan, a former executive at Amazon and a New York Fed alumnus, now finds himself stepping into a role that is not so much a job as it is an extreme sport. One where interest rates are a national obsession and the president has famously favored policies that defy textbook economics with the passionate intensity of a teenager insisting that pineapple belongs on pizza.
The appointment is the latest move in Erdoğan’s ongoing effort to steer Türkiye’s economy back toward orthodoxy, or at least toward something that gives the impression of giving orthodoxy a polite nod from across the room. Observers remain guardedly optimistic that Karahan, an MIT-trained economist with a résumé longer than a Turkish winter, will enjoy more operational independence than his predecessors, provided “independence” continues to mean “keeping the president happy.”
Markets reacted with the emotional restraint of a British butler, showing mild relief that someone with actual central banking experience is holding the monetary wheel, at least for now. Meanwhile, inflation in Turkey continues to hover somewhere between troubling and theatrical, with no clear end in sight unless Karahan finds a monetary policy wand hidden beneath the central bank’s carpet.
Still, Karahan’s appointment signals at least the possibility of steadier hands at the monetary helm and maybe even a page turned in the country’s ongoing economic saga. Or at the very least, new handwriting on the same much-crumpled page.
Because in Turkey’s central bank, the only thing more volatile than the lira is the org chart.