ISTANBUL, March 20 (Reuters) - Turkey’s new central bank governor, Sahap Kavcioglu, is a critic of high interest rates and a former lawmaker who is close to President Tayyip Erdogan. While he is known among local bankers and some investors, he is little known among mainstream economists and beyond Turkey’s borders.
Kavcioglu, the fourth bank chief named by Erdogan in five years, was appointed early on Saturday in the latest surprise overhaul of Turkey’s economic leadership.
Here is some background on Kavcioglu:
- In his columns in the pro-government Yeni Safak newspaper, Kavcioglu - like Erdogan - says high rates will not solve Turkey’s economic problems. Tight policy will “indirectly cause inflation to rise”, he wrote last month, espousing an unorthodox view of monetary economics.
“The central bank must not insist on its high interest rate policy. When interest rates in the world are near zero, us going for a rate hike will not solve economic problems,” he wrote.
- An economist, he held senior positions over more than 25 years at Turkish banks including Vakifbank, MNG Bank and Esbank. He was deputy general manager at state lender Halkbank for 10 years until 2015, covering credit and retail banking.
- Kavcioglu is a former member of parliament for Erdogan’s ruling AK Party (AKP), which has run the country for nearly two decades. He was elected in 2015 as a deputy in Bayburt, an AKP stronghold in the country’s northeast where he was born in 1967.
- He has a doctoral degree from Marmara University in Istanbul, where he was a lecturer in the School of Banking and Insurance. The advisor on his thesis was Erisah Arican, who in January was elevated to deputy chair of Turkey’s Wealth Fund. Kavcioglu has published books on problem bank loans, energy sector investments and interest-free developments.
- Kavcioglu takes over from Naci Agbal, who in just four months on the job hiked rates by 875 points to 19% to head off inflation, sparking a rally in the lira from record lows. The latest rate hike, on Thursday, was bigger than expected.
Reporting by Jonathan Spicer and Nevzat Devranoglu Editing by Frances Kerry
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