Turkish Lira Tumbles After Erdogan Appoints Son-In-Law As Finance Minister

While UK Prime Minister Theresa May is losing control, Turkish president Erdogan is solidifying his, with traders closely watching the cabinet Erdogan would appoint after he was officially sworn in. What happened next shocked traders when Bloomberg reported that Erdogan has appointed Berat Albayrak, the former minister of energy and his son-in-law as Minister of Treasury and Finance.

Albayrak gained some prominence in late 2015, when a CHP lawmaker Eren Erdem accused Albayrak of being linked to ISIS oil smuggling, claiming that he was able “to establish that there is a very high probability that Berat Albayrak is linked to the supply of oil by the Daesh terrorists.

Albayrak is also linked the jailed Turkish-Iranian gold trader Reza Zarrab, who allegedly was charged with helping Iran sidestep US sanctions to export oil with the assistance of corrupt Turkish high officials and then to launder the income. As we reported last December, Zarrab named a confidant of Erdogan, the former Turkish Economy Minister Zafer Caglayan, as having taken bribes amounting to over US$60 million and also implicated Turkey’s Aktif Bank, which is part of a holding company headed at the time by Erdogan’s son-in-law, Berat Albayrak.

Other Erdogan appointees include:

  • Foreign Minister: Mevlut Cavusoglu
  • Vice President: Fuat Oktay
  • Defense Minister: Hulusi Akar
  • Interior: Suleyman Soylu
  • Energy: Fatih Donmez
  • Transportation: Mehmet Cahit Turan
  • Trade: Ruhsar Pekcan
  • Industry, Technology: Mustafa Varank
  • Justice: Abdulhamit Gul
  • Education: Ziya Selcuk
  • Health: Fahrettin Koca
  • Environment, Urbanization: Murat Kurum
  • Agriculture: Bekir Pakdemirli
  • Culture, Tourism: Mehmet Ersoy
  • Sports: Mehmet Kasapoglu
  • Labor: Zehra Zumrut Selcuk

Erdogan also announced that he had reduced the number of ministries to 16, including the VP post.

But today’s surprise double whammy came when Erdogan left out from his cabinet the current Deputy Prime Minister Mehmet Simsek who as Bloomberg writs, “was practically the economy czar of the government.”

The market response to this bizarre example of nepotism was a plunge in the Lira, which tumbled from 4.60 to 4.75 in the manner of minutes…

… while the Turkey ETF tumbled 3.7%…

… as investors expressed their dismay that in addition to taking over government, Erdogan now appears set to also subjugate the economy, making it her personal fiefdom.

For context – this is the biggest collapse in Turkey’s currency since July 2016’s coup attempt.

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Author: Tyler Durden