Turkey's new finance minister, the son-in-law of President Recep Tayyip Erdoğan, on Tuesday vowed to bring inflation down to single digits.
Berat Albayrak, 40, was yesterday named by Erdoğan as treasury and finance minister. Albayrak previously served as energy minister and, before that, led a company seen as close to the government.
"We are facing a period where we have to work hard to bring inflation down to single digits again," Albayrak said at a handover ceremony with former finance minister Mehmet Şimşek adding that Turkey will have a stronger monetary policy in the upcoming period.
Albayrak's surprise switch from the energy ministry spooked financial markets, according to reports of international news agencies.
"The new cabinet excludes former deputy prime minister Mehmet Şimşek, considered the most market-friendly minister in the previous government," the Reuters news agency said.
"Albayrak becoming the finance minister is not a good sign especially because of his close relationship with President Erdoğan. It is a sign that Erdoğan will control economic policy even more," Guillaume Tresca, a senior emerging markets strategist at Credit Agricole, was quoted as saying by Reuters.
"Financial markets were unhappy to see there was no room for outgoing deputy prime minister Mehmet Şimşek, the government's pointman on the economy," Agence French Press (AFP) said in a report.
Inflation in Turkey surged to over 15 per cent in June for the first time in almost one-and-a-half decades, raising new fears that the economy is overheating.
The lira had on Monday lost over 3.5 per cent in value against the dollar after Albayrak's appointment. The lira on Tuesday gained back 0.5 per cent against the dollar to trade at 4.7 to the greenback.
"This is absolutely not what we hoped for," Nora Neuteboom, an economist at Dutch bank ABN Amro told the FT. "Markets were awaiting the cabinet appointed and the signal is clear: it is not market-friendly, but rather Erdogan-friendly."
