With the hustle and bustle of presidential and parliamentary elections left behind and President Recep Tayyip Erdoğan storming into victory once again by securing 52.6 percent of the votes, earning the right to form the first government of the new presidential governance system, the public in Turkey and abroad are now closely watching the announcement of the new cabinet members.
While the speculations and expectations of the local and foreign analysts regarding the new cabinet names are still ongoing, President Erdoğan has already started working on the new government structure and the next cabinet, in line with the new executive-presidential system, as it will enter into force after the president will take oath on July 8.
The president held a meeting in his working office in Istanbul on Tuesday with the participation of Prime Minister Binali Yıldırım, ministers and senior Justice and Development Party (AK Party) officials.
In response to a question about the composition of the new cabinet during an interview on broadcaster TRT, AK Party Deputy Chair and Spokesperson Mahir Ünal said the final decision would be made by Erdoğan.
"There may be figures from the business world, culture and sports. There could be people who have lived abroad but who know both the world and Turkey very well. It is important to set up the state governance within the logic of management organization and free of political balances," he said.
In his earlier interviews, President Erdoğan had also signaled he may appoint successful business people as either ministers or members of the economy team in the new cabinet. It is believed that the majority of ministers will be from outside the Parliament with some technocrats as well.
The foreign fund managers reckon that the appointments in the new cabinet will shape Turkey's economic and political course in the period to come and they reportedly favor experienced and market-friendly names.
Cautiously watching TL-denominated assets for a while, the fund managers will consider the economic policies of the new government in taking decisions concerning the TL assets. The sustainability of the orthodox policies, they say, will entice to invest in TL-denominated assets.
Lombard Odier Investment Managers chief investment strategist Salman Ahmed stressed that the new government has to pledge to make economic stability a priority meaning that tighter monetary policy and more reforms in the fiscal area are necessary. Otherwise the cautious attitude of investors will continue, he added.
Markus Schneider, an emerging market economist for Central & Eastern Europe, the Middle East and Africa (CEEMEA) at Alliance Bernstein, said the victory gave Erdoğan some scope to take a more orthodox stance.
"Investors would have been much more concerned if he had had a very slim margin of victory and a very weak mandate," Schneider said. Investors particularly want to see whether the central bank will act independently so it can deliver another rate increase and bring inflation down.
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