Turkish lira slips despite appointment of well-regarded finance minister

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Turkey's lira slid almost 1% on Monday in thin trading during the Asian day to weaken past 21 per dollar, in a shaky initial reaction to the appointment of highly-regarded Mehmet Simsek as finance minister.

that President Tayyip Erodogan's newly-elected government is moving away from unorthodox interest rate cuts in the face of high inflation that sent the lira on a long decline.

"The hope is that he could instigate much-needed economic orthodoxy and engage with the market more effectively," said Mohammed Elmi, senior portfolio manager for emerging markets fixed income at Federated Hermes. Turkey's annual consumer price inflation hit a 24-year peak beyond 85% last year, and stood at 44% in April in a sign that further monetary tightening was required, according to Elmi.

"A simple return to credible economic policy could see a marked change in Turkey's investment appeal," he said. "The long term outlook for Turkey is still very much a positive one ... a young population, a burgeoning middle class, and a country that occupies a key strategic location, it has a number of factors in its favour."

 

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Turkish economy to return to 'rational ground', new finance minister saysTurkey's newly appointed Finance Minister Mehmet Simsek said on Sunday that the country has no choice but to return to 'rational ground' to ensure predictability in the economy.
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