Supporters of Turkish President Tayyip Erdogan attend his election rally in Istanbul, Turkey, June 23, 2018.
(photo credit: ALKIS KONSTANTINIDIS / REUTERS)
ISTANBUL - The Turkish lira recovered the bulk of its overnight losses early on Tuesday, having slid some 3 percent after President Tayyip Erdogan announced his new cabinet in which his son-in-law will serve as the treasury and finance minister.
Erdogan's new cabinet excluded former deputy prime minister Mehmet Simsek who was considered the main market-friendly minister in the previous government.
The lira, which has lost nearly a fifth of its value against the dollar this year, stood at 4.6640 at 0624 GMT, having weakened as far as 4.75 overnight. It had closed at 4.5745 on Friday.
Berat Albayrak's appointment as treasury and finance minister comes as investors worry about Erdogan's drive for greater control over monetary policy.
"Albayrak will have to move very quickly to re-assure financial markets - and will need to send a signal that he will listen," BlueBay Asset Management strategist Timothy Ash wrote on Twitter.
"The economy faces a challenging time and this is a time for orthodoxy," he added.
A decree on Tuesday said the president will appoint the central bank governor and monetary policy committee members for a 4-year period. Previously the governor's appointment was made by a cabinet decision for a five-year period.
The yield on the benchmark 10-year bond was at 17.35 percent in spot trade on Monday and fell to 17.11 percent in Tuesday-dated trade. The main BIST 100 share index rose 0.53 percent to 99,252.84 points on Monday.