Morgan Stanley: Karahan appointment does not signal change in monetary policy

US investment bank Morgan Stanley has evaluated the appointment of Fatih Karahan as Governor of the Central Bank of the Republic of Türkiye (CBRT). In its assessment, the bank stated, "Unlike previous changes in governors, this does not signal a change in policy direction or a political preference for lower interest rates."

Morgan Stanley evaluated the recent resignation of Hafize Gaye Erkan for personal reasons and President Erdoğan's appointment of Fatih Karahan as the new CBRT Governor. The bank said, "We expect the CBRT to continue with its conventional monetary policy framework that prioritizes the fight against inflation under Governor Karahan's leadership."

Reminding that Fatih Karahan was appointed as deputy governor and a member of the Monetary Policy Committee (MPC) in July, Morgan Stanley emphasized that he played a significant role in the CBRT's tightening steps in August following his appointment.

The bank included the following statements in its assessment:

"Our view is that, unlike the past changes in governors in 2019 and 2021, this does not signal a change in policy direction or a political preference for lower interest rates. We expect the CBRT to continue with its conventional monetary policy framework that prioritizes disinflation. We will have the chance to hear the CBRT's policy messages at the Inflation Report press conference to be held next Thursday (February 8)."