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Turmoil at the Top: Power Struggles and Allegations Inside the Turkish Central Bank

M. Ahmet Karabay

For the past week, discussions about Hafize Gaye Erkan, the Governor of the Central Bank, have focused more on allegations of favoritism than her actual performance. Interestingly, everyone approaches the topic from their own standpoint. For some, the Erkan family has established a reign at the Central Bank, while others believe that things were just starting to improve when they were disrupted.

For those who think I write a lot about the heads of Central Banks, let me note that Central Bank governors worldwide are often more newsworthy than the country’s leaders themselves. I won’t bore you with examples, but if you think about it, from the USA to Japan, you’ll agree with my point.

On January 11th, the day Gaye Erkan attended the “Investor Days” meeting in New York, everyone, whether they were pro-government or opposition, was wondering, “How much money will she bring in?” Those who follow my column will remember, on the same day, the title of my article was “Pro-government media sets a trap for Gaye Erkan.”

Referring to the media reports about the “$50 trillion fund,” I had stated, “This is less about raising hopes and more about gathering ammunition for the coming days of conflict.” The last sentence of my article was, “You can start guessing whether Gaye Erkan will pack her bags before or after the election.”

When this article was written on January 11th, there was no hint of any tension that had leaked to the public. Today, those who portray every allegation about Gaye Erkan as true and cause an uproar had no information about what was going on behind the scenes.


Firstly, it’s necessary to underline that the allegations against Gaye Erkan are quite serious. Allocating an office on the 9th floor, which is an executive floor, for her father, creating a private kitchen in the bank for her family, her father Erol Erkan slapping a waiter, home delivery of meals with a corporate vehicle, her mother Gamze Erkan having special contacts with bank employees…

These are worrying allegations. If even one is true, it’s enough to unseat the governor. There is no document yet proving whether they are true or not. The only source of information is the allegations of Büşra Bozkurt, who was removed from her position at the Central Bank. Sözcü Newspaper reported on the complaint letter Bozkurt wrote to CİMER.

The transfer of the letter in CİMER to Sözcü, and the fact that Büşra Bozkurt, who claims to be a victim, wears a headscarf, are aspects that enhance the credibility for both parties. A woman with a headscarf speaks to Sözcü; Sözcü makes news by supporting a woman with a headscarf…

Another striking aspect of the case is the member of the IYI Party, who is considered the epitome of honesty (!), Deputy Turhan Çömez, presenting all these allegations as if they were proven and documented, saying, “I asked these as a parliamentary question.”


However, if the issue involves Bilal Erdoğan, the heir, my professional experience tells me to look at this matter even more skeptically.

A while before these allegations became public, President Gaye Erkan removed Yusuf Kenan Bağır, the General Director of Data Governance and Statistics of the bank, from his position. I couldn’t find out the reason for his dismissal, but it was such a removal that his name was immediately erased from the phone directory.

Yet, Yusuf Kenan Bağır returned to his position two days later. Everyone in the Central Bank knows and talks about Bilal Erdoğan’s role in reinstating him. Because Bağır is a schoolmate of Bilal Erdoğan from Kartal Imam Hatip High School. This is confirmed by the information Bağır shared on his social media LinkedIn.

The power that reinstated Yusuf Kenan Bağır within two days has been pressing for the removal of Gaye Erkan since then. On January 11th, when it was said that “there was no issue at hand,” I had pointed out the trap set by the pro-government media without going into details.

The trap was set by Bilal Erdoğan and the pro-government media in contact with him, and marketed by the opposition. When the power of the heir is mentioned, I always remember Muharrem İnce’s statement about “the ranking of the most business-making schools in the world.” İnce first mentions Oxford, then Harvard, and thirdly Kartal Imam Hatip High School.


During the days when President Erdoğan led the country to disaster by saying, “I am an economist. Interest is the cause, inflation is the consequence,” and the world was increasing interest rates, Central Bank Governor Naci Ağbal took a correct step by raising the interest rates from 8.5% to 15%.

Yeni Şafak, which grew with sweet loans from state banks and is part of the Albayrak Group, headlined this interest rate hike on March 19, 2021, as “For whom did you perform this operation?” Subsequently, as known, Ağbal was replaced by Şahap Kavcıoğlu, a writer for Yeni Şafak who acted in line with the directives of the Beştepe Palace.

We are all experiencing the consequences of the policies followed by Şahap Kavcıoğlu. After the June 28, 2023, elections, Erdoğan removed Kavcıoğlu from the Central Bank but appointed him as the head of the Banking Regulation and Supervision Agency, a critical position.

Following the news about Gaye Erkan, Kavcıoğlu and the mindset he represents are now rubbing their hands. If Gaye Erkan leaves, Kavcıoğlu will not return to the Central Bank; his future lies in the Ministry of Treasury and Finance, where Mehmet Şimşek is. Erkan’s departure indicates that it’s Mehmet Şimşek’s turn.

Don’t worry too much. Rest assured, Kavcıoğlu can’t do worse than Nurettin Nebati.

Why do you think there has not been a single defense article from the pro-government side while so many news stories about Gaye Erkan are circulating? Can the ingenious members of the government, who managed to present the assault of the Kaymakam of Diyarbakır Kulp on the imam with kicks and punches after swearing as “Our Kaymakam ensured that the imam completed the sermon,” not think of defending Gaye Erkan, whom they entrusted the Central Bank?

It seems clear that Gaye Erkan’s ticket is cut. Her removal by a decree of President Erdoğan is tied to a process to prevent the negative atmosphere it would create in domestic and foreign markets. Moreover, she will leave carrying the burden of the most disturbing allegation of nepotism.

Like previous dismissals… Just as the reputation of Central Bank governors, TÜİK presidents was destroyed first and then they were dismissed, it seems the same will happen with Erkan.

Despite all the news, not even the Minister of Treasury and Finance Mehmet Şimşek supported Gaye Erkan, the head of the Central Bank. In all this news, Şimşek only denied the allegations made by Oda TV that “Mehmet Şimşek’s team is serving the news about Gaye Erkan.”

Am I the only one who senses that behind Büşra Bozkurt’s confidence boost lies the support of the power backing her?

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