Fatih Karahan

Fatih Karahan became Governor of the Central Bank of the Republic of Turkey (CBRT) in February 2024, succeeding Hafize Gaye Erkan. A PhD economist who worked at the Federal Reserve Bank of New York, Karahan brings rigorous central banking expertise to an institution that had been through five governors in five years — a revolving door driven by President Erdogan's unorthodox insistence on low interest rates despite soaring inflation. Karahan represents the continuation of Turkey's dramatic monetary policy U-turn that began under his predecessor. After years of rate cuts in the face of 80%+ inflation — a policy that devastated the lira and wiped out household savings — the CBRT reversed course in mid-2023, raising rates from 8.5% to 50% in a historic tightening cycle. Karahan has maintained this ultra-tight stance, signaling that the CBRT will keep rates elevated until inflation is decisively broken. The challenge is immense: Turkish inflation remains among the highest in the G20, the lira has lost over 80% of its value against the dollar in recent years, and dollarization of the domestic economy is entrenched. Karahan must sustain the painful high-rate regime long enough to anchor expectations while building institutional credibility that was severely damaged by the preceding era of political interference. His decisions directly drive Turkish government bond yields, lira dynamics, and the trajectory of Turkey's return to the mainstream emerging market investment universe.