Berat Albayrak resigned: How do the markets react?

The events affecting the fiscal and monetary policies of Turkey have been experienced this weekend in a consecutive way. Before Friday night, the president of the Central Bank of the Republic of Turkey (CBRT), Murat Uysal, was removed by decree.

Naci Ağbal, a former finance minister, was replaced by Uysal.

Then, on Sunday night, the Minister of Finance and Finance, Berat Albayrak, announced on his Instagram account that he resigned from his position for health reasons.

So how will the markets opening Monday morning start the week with these developments?

The Bloomberg news agency said that markets are preparing to issue a verdict on the resignation of the finance minister with the second change of head of the CBRT in 16 months.

It was also highlighted in the news that the Turkish lira is the worst performing currency among developing countries this year.

This year, the TL lost 30 percent against the dollar.

According to market experts spoken by Bloomberg, Naci Ağbal’s new CBRT director will not be enough for TL to recoup its losses.

According to analysts, if Ağbal does not raise interest rates, the fact that inflation is in the double digits, the current account deficit and the melting of foreign exchange reserves are the factors that will determine the depreciation of the LT.

“The lira is likely to continue to fall. The low level of political credibility means that depreciation will continue; the only thing that can relieve investors is loose money,” Hasnain Malik, chief asset strategist at the research firm, told Bloomberg. market leader Tellimer, based in Dubai. We may come to the end of politics.

Goldman Sachs economists Murat Unur and Clemens Grafe, on the other hand, claimed that there will be no change in exchange rate, inflation and reserve trends in appreciation that there is no serious change in monetary policy in their market rating.

The election of Democratic candidate Joe Biden to the US presidency is seen as a negative development for Turkish assets, with the expectation that bilateral relations will not improve.

Speaking to the Financial Times newspaper, Columbia Threadneedle currency analyst Ed Al-Hussainy said that these changes in economic management created a very tense environment for TL.

The Financial Times reported that Albayrak and Naci Ağbal were not getting along very well, referring to two sources close to the AKP.

Bloomberg also stated in his report that Ağbal was known to be against Albayrak’s policies for the past two years.

The economist Güldem Atabay, in his assessment on Twitter, said that TL could strengthen on Monday; however, he stated that the main problem is the political system.

Economics writer Uğur Gürses said: “If the news of the resignation is correct, it would be the right step to stop the depreciation of the TL, even to gain value.”

Member of the Faculty of Business Administration of the University of Marmara Prof. Dr. Burak Arzova, in his assessment on his YouTube channel, stated that the resignation of Albayrak of his own free will could be positive considering the criticism brought to the economic management.

Arzova said that “this situation can be reflected positively in the markets, the criticisms came in the framework of the level of the exchange rate and explanations about the exchange rate,” said Arzova, adding that a name accepted by the market would be positive for the markets.

The USD / TL rate hit a record 8.5793 on Friday.

According to Reuters, today the dollar / TL has fallen to 8.40 in illegal transactions.

It was said in the news that the TL appreciated 2 percent in the first trades before Asian markets opened.