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Erdogan’s first decrees: Power to pick central bank, military chiefs

  • 10 July 2018
  • Author: QT01
  • Number of views: 1093
Erdogan’s first decrees: Power to pick central bank, military chiefs
Turkish President Recep Tayyip Erdogan will appoint the central bank governor and top military officials, according to his first decrees published on Tuesday, a day after he was sworn in with vastly expanded powers.
Three decrees published in the official gazette in a total of 206 pages outline the government overhaul now that Turkey has completed its transition to an executive presidency from a parliamentary model.
"The president is the head of the state. The power over the executive belongs to the president," reads the first sentence.
One of the decrees says the president will appoint the central bank chief for a four-year term, down from the earlier five-year stint.
Erdogan hand-picked a cabinet of 17 on Monday that includes his son-in-law Berat Albayrak as treasury and finance minister, a choice closely watched by investors.
His mandate under the executive presidency makes Erdogan solely responsible for cabinet and vice presidential appointments, with no need for parliamentary approval.
"Albayrak will have to move very quickly to re-assure financial markets - and will need to send a signal that he will listen. The economy faces a challenging time and this is a time for orthodoxy," Timothy Ash, emerging markets sovereign strategist at BlueBay Asset Management, wrote on Twitter.
In an interview before the June 24 presidential and parliamentary elections, Erdogan signalled that he would exert more control over economic policy if he won.
The president has an unorthodox economic viewpoint, opposing higher interest rates, claiming they cause inflation. He has previously spoken of a Western conspiracy to destabilize the economy.
Albayrak, the former energy minister, has in the past referred to a plot against Turkey on the markets.
Inflation rose sharply to a 15-year high of 15.39 per cent in June. It was at a six-month high of 12.5 per cent in May before the elections.
The lira has plunged by more than 20 per cent against the dollar and the euro since the start of the year, forcing the central bank to intervene on May 23 by hiking its key interest rate by 300 basis points to 16.5 per cent in order to shore up the currency. Days later, the bank moved to simplify its interest rate policy.
The decrees also say that Erdogan will appoint and promote the top brass in the armed forces.
The land forces commander, General Yasar Guler, was chosen as the army chief of staff, state news agency Anadolu reported. His predecessor General Hulusi Akar, was picked as defence minister.
The cabinet - which includes only two women and was reduced to 17 from 21 ministers and five deputy prime ministers - was sworn in on Tuesday. It will meet for the first time on Friday.
Erdogan is visiting Azerbaijan and northern Cyprus on Tuesday, before heading to Brussels for a NATO summit.
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