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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