(Bloomberg) -- President Recep Tayyip Erdogan named his son-in-law as economy czar in his new administration, completing a years-long process that saw members of his investor-friendly A-team removed from the government one by one. The lira plunged.
Berat Albayrak, a former energy minister who entered parliament for the first time in 2015, will be in charge of a new ministry of treasury and finance, combining what used to be the two most powerful economic jobs. He’ll replace Mehmet Simsek, the last man standing from a group of politicians who’ve been trusted by investors over the years to rein in the president’s go-for-growth instincts and keep Turkey’s $880 billion economy on a sustainable path. There was no job for Simsek in the downsized cabinet of 16 ministries.
The lira extended losses after the president’s announcement, falling 2.3 percent to 4.68 per dollar at 10:52 p.m. in Istanbul.
Erdogan was sworn in earlier on Monday for a second term as president with enhanced powers, after winning re-election last month under an amended constitution. He promptly signaled that he’ll follow through on a pre-vote promise to take more direct control over monetary policy.
A government decree published in the official gazette has scrapped the old system under which the central bank governor is chosen by the prime minister and other cabinet members, and then gets a say in the appointment of his own deputies, who sit on the bank’s Monetary Policy Committee that sets interest rates. A second decree outlining who will make those decisions in the new presidential system is expected in the coming hours.