Turkish lira, markets stable after major cabinet reshuffle
Hurriyet Daily News with wires
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The Turkish currency lira traded slightly below 1.59 levels in the afternoon nearly the same levels with Thursday close, losing its early gains after the major cabinet reshuffle that led to a change in country's economy administration. The markets were closed on Friday for a public holiday.
The lira traded at 1.57 levels against the dollar on the interbank market in early trading.
In Friday's cabinet revamp, Prime Minister Tayyip Erdogan sacked a third of his ministers and most notably appointed Ali Babacan a deputy prime minister in overall charge of the economy.
"I think the cabinet changes are positive. Babacan had this role (economy minister) in the past when the AKP was strict in economic management. The government is trying to give markets the message that it will again take this approach," Reuters reported, Ekspres Invest chief economist Guldem Atabay, as saying.
Erdogan said at the weekend the reshuffle and appointment of an economy minister with a larger portfolio was aimed at bolstering fiscal discipline as the country heads into recession.
The ruling Justice and Development Party, or AKP, was punished in the municipal polls in March for failing to address the weakening economy, expected to contract by as much as 6 percent this year.
The reshuffle is not expected to see major policy changes as Erdogan keeps control of key decisions.
The yield on the benchmark bond maturing on Feb. 2, 2011, stood at the same level of Thursday's 12.22 percent.
Markets will closely watch inflation data for April due at 1400 GMT. A Reuters poll showed that the consumer price index was expected to rise 0.72 percent month-on-month compared to 1.10 percent in March.