Turkish stocks surged to record highs, while the lira remained at all-time lows, as the appointment of two former Wall Street bankers to the country’s new economy team offered hope that Turkey is likely to return to orthodox and conventional policies.
(Bloomberg) — Turkish stocks surged to record highs, while the lira remained at all-time lows, as the appointment of two former Wall Street bankers to the country’s new economy team offered hope that Turkey is likely to return to orthodox and conventional policies.
The Borsa Istanbul 100 Index climbed as much as 1.8% to an all-time peak of 5,730.19, extending gains to 25% since the second round of presidential elections on May 28. Still, the benchmark remains among this year’s worst-performing major indexes in US dollar terms, falling 18% a result of lira weakness, which has accelerated amid signs that the government is loosening its costly intervention strategy.
The benchmark has been on a tear since after President Recep Tayyip Erdogan pledged a new economy team with “international credibility” in his first speech following the elections. On Friday, he appointed Hafize Gaye Erkan, a former co-chief executive officer of First Republic Bank, to head the country’s central bank, a week after naming Mehmet Simsek, a former Merrill Lynch strategist, as his new treasury and finance minister.
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Traders are hopeful that the appointments show Turkey is moving away from the unorthodox economic policies that have led to a capital flight by foreign investors in recent years.
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