Appointments to be made by Turkey’s new finance minister will be decisive for confidence in markets
Presidential appointments to be made to the Central Bank, TURKSTAT and CMB (Capital Markets Board) by Mehmet Şimşek, will be the first test of the program which the government hopes to enjoy approval of markets.
APPOINTMENT OF 3 PRESIDENTS WILL BE THE FIRST TEST
The appointment of Mehmet Şimşek as the Ministry of Treasury and Finance to fix the economy has been finalized. Şimşek will give his first test on giving confidence to the public and markets with the presidential appointments he will make at 3 critical institutions. The names to be appointed to the presidencies of the Central Bank, the Turkish Statistical Institute (TURKSTAT) and the Capital Markets Board (CMB) are of critical importance in terms of whether we markets will display confidence in Şimşek and the new program.
There is also talk that the Head of the Central Bank may be announced by President Erdogan at the same time with the cabinet.
Here are 3 critical institutions:
CRITICAL INSTITUTIONS ARE AS FOLLOWS:
CENTRAL BANK: It is considered certain that Şimşek will change the governor of the Central Bank. Together with the president, a serious change in the monetary policy of the Central Bank is also expected.
When talking about a new structure in which interest rates will be gradually raised, pressures on foreign exchange demand will be gradually reduced, a transparent and predictable policy will be followed. The question is whether prevailing regulations will be good enough to ensure the President stays in office for 5 years so as to enjoy increasing confidence in markets. It is reported that Hafize Gaye Erkan from the USA is definitely being considered for the presidency of CBRT.
TURKSTAT: The resetting of public confidence in the data announced by TURKSTAT that are closely related to society, such as inflation, growth, unemployment, has made it mandatory to appoint a new and reliable president to the head of the institution.
It is stated that in order to have confidence in Şimşek and the new economic program that he will announce, it is necessary to bring 5-year protection armor to the president of TURKSTAT as before and to hand over the chair to an academician that everyone will trust. July data is expected to be the first exam of the new TURKSTAT president, which he is expected to announce in July.
CMB (Capital Market Board): The government aims to attract foreign investors to Turkey with the new program. The first place that foreigners look to come to is the stock exchange. However, the recent sharp ups and downs in the stock market have led to serious losses of confidence, especially towards the CMB.
Whether Şimşek can appoint a chairman who gives confidence to the CMB management and to the domestic and foreign markets will play an important role in the success of the new program.
THESE INSTITUTIONS ARE ALSO CRITICAL
A radical change is also expected in the Treasury and senior staff in Finance, who will be included in Şimşek’s close bureaucracy team. It is stated that messages will be given to markets with appointments in many institutions such as Financial Crimes Investigation Board (MASAK), Revenue Administration etc.
In the same way, it is said that radical changes in the Banking Regulatory and Supervisory Board (BRSA) will not be a surprise which will be expected to support the search for trust.
