President to appoint central bank governor for 4 year period

ISTANBUL

A Turkish presidential decree issued on July 10 after President Recep Tayyip Erdoğan was sworn in with new executive powers said the president will appoint the central bank governor, deputies and monetary policy committee members for a four-year period.

Three presidential decrees, published in the country’s Official Gazette, set out the structure of the new presidential system and the regulations governing the appointment of officials by the president.

Previously, there had been a five-year term for the central bank head but a decision published in the Official Gazette removed this stipulation and scrapped a requirement that deputy governors have a decade of experience.

An earlier presidential decree merged treasury and finance ministries, and Berat Albayrak, the former energy minister and President Erdoğan’s son-in-law, has been appointed to the newly created post to be in charge of the economy.

The Turkish lira recovered the bulk of its overnight losses early on July 10, having slid some 3 percent after President Erdoğan announced his new cabinet.

The lira, which has lost nearly a fifth of its value against the dollar this year, stood at 4.6640 at, having weakened as far as 4.75 overnight. It had closed at 4.5745 on July 6.

The yield on the benchmark 10-year bond was at 17.35 percent in spot trade on July 9 and fell to 17.11 percent in July 10-dated trade.

The executive system of government that began with Erdoğan’s swearing-in scraps Turkey’s parliamentary governance structure and boosts the powers of the formerly ceremonial presidency.

Under the new system, the president forms government, appoints ministers, vice presidents and high-level bureaucrats. Previously, the prime minister -now a defunct post- formed the government by making elected members of parliament ministers.

The president can issue decrees, prepare the budget and has the power to impose a state of emergency. Parliament legislates, can ratify or reject his budget and the president needs parliamentary approval for emergency rule and decrees passed during that time.