Laying out her philosophy in her debut news conference, Hafize Gaye Erkan pledged that her holistic approach would - in addition to interest rate hikes - make use of a range of levers and macroprudential policy tools, potentially including curbs on loan growth in key sectors or credit card spending.
"That's the buzzword - holistic," said Kaan Nazli, a portfolio manager at asset manager Neuberger Berman, who noted her emphasis on a slowdown in domestic loan growth - a lever to tighten policy outside the lifting of lending rates. who returned to head Turkey's Finance Ministry after the election. Both are expected to tackle economic strains that have sent the lira to consecutive record lows, embedded double-digit inflation and vaporised tens of billions of dollars of foreign exchange reserves.
While a "holistic" approach sounded nice, said Ash, it was "really just a sanitised and alternative word for "unorthodox".There was broad agreement among investors that Erkan is facing an uphill struggle with her strategy unlikely to deliver a swift pivot towards economic orthodoxy after years of Erdogan pushing for lower interest rates as a remedy for high inflation.
Unlike some of her predecessors, Erkan chose to answer all the questions at the news conference herself, rather than defer them to her colleagues, switching easily between Turkish and English during the live event.She swerved politically charged questions on the influence of Erdogan's government on monetary policy making - a thorny issue for the nation of 85 million where many are reeling under a cost of living crisis.
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