The announcement of the new cabinet by Prime Minister Binali Yıldırım created excitement and optimism in Turkish markets, resulting in sharp gains in the value of the Turkish lira and Borsa Istanbul Stock Exchange, or BIST 100 Index, and falls in the compound interest rate of the 10-year benchmark bond. Markets showed a positive response to the expected reappointment of Mehmet Şimşek as deputy prime minister in charge of the economy, while other names with experience were assigned economy-related ministries, such as Economy Minister Nihat Zeybekci.
This brought the Turkish lira up against the dollar, from 3.01 to 2.97, following Yıldırım's announcement. At 3:45 p.m. (GMT+3), the exchange rate between the dollar and the Turkish lira was around 2.9590, showing further decreases despite the interest rate cut decision from the Central Bank of the Republic of Turkey (CBRT), to which markets generally react negatively. The BIST 100 Index, which had been following a flat path, jumped up by 2 percent to 78,170, with strong purchases following the announcement of the cabinet. By 4:00 p.m., BIST 100 Index realized a 3 percent gain to 79,066. The compound interest rate for the 10-year benchmark bond decreased from 10.43 percent to 10.12 percent. Prior to the determination of the cabinet, concerns over how the economic policies would be shaped and whether Mehmet Şimşek would take part in the new cabinet had led to intense sales in the markets.
The business community welcomed the names in the new Cabinet with gratitude. According to the Foreign Economic Relations Board's (DEİK) press release, the business community strongly believes the new government will bring prosperity to the country and maintain discipline in the implementation of the current reforms along with the second generation reforms to be put in effect. Also, Independent Industrialists and Businessmen's Association (MÜSİAD) Chairman Nail Olpak said the business community will always lend its full support to the government, which will continue to serve the nation. Olpak added that they are sure of the fact that the government will take strong steps toward achieving its future development goals.
