With the lira suffering a year-long rout in international markets, Turkey needed a sign of political stability, so many hoped the ascension of Recep Tayyip Erdogan to the newly enhanced presidency on July 9 would herald a period of economic calm.
It was not to be. The day after his inauguration, Mr Erdogan dismissed Mehmet Simsek, an experienced former Merrill Lynch economist, as head of the economic and financial policy portfolio, and appointed his son-in-law, Berat Albayrak, as new minister of finance. The country’s main stock market index, the BIST100, fell about 6% on the news. Turkish banks led the losses, with the Turkish banking index (XBank) seeing a 21.6% sell-off over the two weeks that followed the announcement of the new cabinet.
