Simsek won markets' confidence as finance minister and deputy prime minister between 2009-2018 and his appointment is seen signalling a return to more orthodox policy. He said on Sunday there was no choice but to return to "The lira , under pressure since before May elections, weakened as far as 21.18 against the dollar from 20.9 on Friday and is nearly 12% weaker so far this year. It briefly spiked to a record low of 21.8 on May 31.
Data on Thursday showed central bank net forex reserves had dropped to their lowest level on record on May 26, standing at negative $4.4 billion, as it sought to counter the foreign exchange demand.that President Tayyip Erdogan's newly-elected government is moving away from unorthodox interest rate cuts in the face of high inflation that sent the lira on its 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. "A simple return to credible economic policy could see a marked change in Turkey's investment appeal," he said, pointing to a positive long-term outlook with a young population, a burgeoning middle class and a key strategic location.
Turkey's dollar-denominated government bonds rose as much as 1.1 cents and the cost of insuring against a Turkish debt default fell, with Credit Default Swaps dropping to 541 basis points from Friday's closing level of 550 bps, data from S&P Global Market Intelligence showed.
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