ibusinesslines.com September 20, 2018

Turkey's Erdogan sworn in with new powers, appoints son-in-law as finance minister

12 July 2018, 02:18 | Kelvin Horton

Erdogan acquired 52.5 percent of the votes in the presidential election on June 24

Erdogan acquired 52.5 percent of the votes in the presidential election on June 24

Erdogan won an absolute majority in the presidential election with 52.5 percent of the vote.

The post of prime minister has been scrapped and the president will be able to select a cabinet, regulate ministries and remove civil servants, all without parliamentary approval.

Speaking at his sprawling presidential compound in Ankara, Erdogan unveiled the rebranded presidency "on this most important day of our country".

Erdogan unveiled the rebranded presidency during his inauguration at the sprawling presidential compound, saying it would bring strength, stability and efficiency to the country. Previously, the prime minister -now a defunct post- formed the government by making elected members of parliament ministers.

Its commentator Asli Aydintasbas wrote: "I don't think it would be an exaggeration to say that we entered a "second republic" era", after the republic set up by Turkey's secular founder Mustafa Kemal Ataturk. His re-election marked Turkey's transition to an executive presidential system of government.

The lira, which has lost almost a fifth of its value against the dollar this year, dropped almost 3 percent to 4.74 to the dollar minutes after the cabinet announcement.

"The pace at which he (Erdogan) is moving to tighten his grip is alarming and, in response, Turkish financial assets have come under pressure", said Jason Tuvey, senior emerging markets economist at Capital Economics, in a note to clients. He said it did away with a "system that heavily cost our country through political, social and economic chaos".

At 16:30 local time (coincides with Moscow time ) Erdogan took the oath of office at the Grand National Assembly of Turkey (parliament).

"Most importantly, there is increasing evidence that the central bank's independence may already be compromised on Erdogan's (likely to be successful) attempts to extend full control over it".

"Turkey is entering a new era with the presidential oath ceremony on Monday", Erdogan told his ruling AK Party at the weekend.

Investors have previously been anxious about the independence of the Central Bank of the Republic of Turkey, after President Recep Tayyip Erdogan said he wanted to take more responsibility in his country's monetary policy.

He will have sweeping new powers, including over the judiciary and the ability to rule by decree. What "is certain", said Ertem, is that the governors will be appointed by the president.

He said Turkey would go further in every area in the new era, including democracy, fundamental rights, economy and large investments.

Erdogan faces economic problems such as high interest rates and inflation as well as a plunging currency that has lost 17 percent of its value against the dollar since the start of 2018.

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