English
Investors in Türkiye are waiting for the selection of a new economic team
The top policymakers handpicked by Turkish President Recep Tayyip Erdogan are now at the center of attention as markets try to gauge whether he will change course toward conventional economic policies or continue with unorthodox policies that are widely seen as unsustainable.
Erdogan is widely expected to take advantage of Sunday's election victory to initiate a sweeping cabinet reshuffle, including the finance and economy ministers and the central bank governor.
The appetite of foreign investors for Turkish bonds and stocks was not great in the past years, with the economy going through waves of prosperity and depression, many bouts of high inflation and the currency crisis that led to the lira losing more than 90 percent of its value over the past decade. On Monday, the lira hit a new record low.
Erdogan's increasing interventions to maintain the stability of the lira and his insistence that interest rates be very low have increased pressure on Turkey's fiscal budget and financial sector. As reserves dwindle, many see changes as inevitable, but the extent or meaning of those changes remains a mystery.
"In an environment where decision-making is highly centralized, the market will only be interested in changing the economics team if this change signals a decisive shift in policy-making," said Emre Akcakmak, asset manager at East Capital, which invests in Turkey.
Divisions over economic policy emerged in the days leading up to the presidential run-off when members of the ruling party met to discuss how to adopt a new policy of gradually raising interest rates and a targeted lending programme.
