On Friday, the Official Gazette published President Recep Tayyip Erdogan’s decision to appoint her, and she is the first Turkish woman to hold the post.Despite her young age (41), she has gained confidence thanks to her history of excellence since his university studies, so his appointment came at the request of the new Minister of Treasury and Finance, Muhammad Simsek.
Who is Hafeza Arkan?
A businesswoman, born in 1982, and studied at Bogazici University.
During her studies at the university, she received offers from 9 universities, such as Stanford, Princeton, Boston, Cornell and California to study there. She preferred Princeton University and obtained a doctorate in financial engineering.
After her studies, she joined Goldman Sachs in 2009.
She then joined First Republic Bank and rose through the ranks to become Chairman, Co-CEO and Board Member, as the youngest CEO among financial institutions in the United States.
In 2019, she was named to the Crane List of Outstanding Women in Banking and Finance.
critical period
Since 2016, Turkey has been facing enormous economic difficulties, including inflation and the decline in the value of the pound, exacerbated by the repercussions of the Corona virus crises, the war in Ukraine and the devastating earthquake that has hit the country on the 6th of last month. February and caused great damage to the infrastructure.
The country is now rated junk by all three major rating agencies.
This situation, coupled with political differences, prompted the Turkish President to dismiss 3 central bank governors in the two and a half years before Shihab Qafji Oglu took office in 2021.
Naji Aghbal, was sacked after 5 months in office, due to a higher-than-expected rate hike of 200 basis points, from 17% to 19%, with further strong monetary tightening confirmed given the upside risks .
Before him, Murad Uysal took over as head of the Central Bank in July 2019, before his dismissal in November 2020.
As for Murad Çetin Kaya, he was removed from his post after raising the basic interest rate by a total of 750 points, with the aim of supporting the exchange rate of the lira.
After the layoffs, interest rates fell under pressure from Erdogan, who describes himself as the “enemy” of interest rates. The central bank lowered the interest rate to 8.5% from 19 % in 2021 to revive growth and investment.
However, this triggered a record crisis for the lira in December 2021 and pushed inflation to its highest level in 24 years, exceeding 85% last year.
Consequently, the authorities intervened directly in the foreign exchange markets, using tens of billions of dollars in reserves to keep the lira stable for most of this year.
This caused net foreign exchange reserves to fall to -5.7 billion dollars, the lowest level on record.
All these points are part of the challenges faced by the first woman to hold this position, in an attempt to deal with these files successfully and in record time.
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