(Bloomberg) -- Turkey’s President Recep Tayyip Erdogan made an apparent show of support for the country’s economic leadership, following allegations against the central bank governor.

“They are starting campaigns with astonishing gossip that will disrupt the climate of trust and stability in our economy, which we achieved with great difficulty,” Erdogan said in a speech in Ankara. He added that he would ignore the “campaigns,” without elaborating on their source or target.

The comments were perceived as a statement of support for central bank Governor Hafize Gaye Erkan, following stories in opposition media that alleged her family was involved in the bank’s affairs. Erkan denies the allegations.

Read more: Ex-Employee Widens Claims Against Turkey Bank Chief’s Father

“Seems like Erdogan calling an end to the Erkan affair. Suggests orthodox policy stance continues,” veteran Turkey watcher Tim Ash of RBC Bluebay Asset Management said on X.

The Borsa Istanbul Banks Index, a gauge that tracks shares of Turkey’s listed lenders, extended gains further following Erdogan’s comments to as much as 5.9%.

“The President’s support for economy management after the recent debates boosted positive sentiment in the market, dispelling ongoing speculations,” said Orkun Godek, deputy general manager of strategy and research at Deniz Investment.

The Turkish lira reversed earlier losses to rise as much as 0.5% against dollar. The five-year credit default swaps, a gauge of country risk, extended losses to 16 basis points.

Turkey has had five central bank governors in as many years, after Erdogan increased his control over the monetary authority. The president has the power to appoint or remove the governor and their deputies at any time.

Erkan was appointed in June after long stints in the US with Goldman Sachs Group Inc. and First Republic Bank. Under her leadership, the central bank has aggressively raised interest rates in a bid to tame inflation running at almost 65%.

--With assistance from Tugce Ozsoy.

(Updates with market reaction and comment from fifth paragraph.)

©2024 Bloomberg L.P.