Turkey's currency woes exacerbate following recent elections

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Turkey's currency woes have exacerbated following the recent elections, which resulted in President Recep Tayyip Erdoğan's successful bid for a third term on May 28.

The USD/TRY exchange rate surged to 21.67 in today's morning hours but later dropped to 21.43. The Euro/TRY rate exceeded 23 for the first time and currently stands at 23.17.

Turkey's credit default swap (CDS), which indicates the ability to repay debt, rapidly declined on the first day of the week following the announcement of the new cabinet that marked the comeback of Mehmet Şimşek as Turkey's Minister of Treasury and Finance.

Previously holding the position from 2009 to 2018, Şimşek return is widely seen as a signal of a shift back to orthodox economic policies.

"There is no alternative but to return to a rational economic ground," the Finance Minister of the Year for Emerging Europe 2013 emphasized during last week's transition ceremony.

Previous Economic Tzar Nureddin Nebati advocated for Erdoğan's controversial "low interest-low inflation" policy. (HA/WM)