After political shake-up, is Turkey heading for economic crisis?
By sidelining Prime Minister Ahmet Davutoglu, Turkish President Recep Tayyip Erdogan has taken full control of the political reins but ambiguity about his economic policies is creating concerns.
As Turkish markets shook after the May 5 announcement of Ahmet Davutoglu's resignation as prime minister, President Recep Tayyip Erdogan came out with his typical defiant tone when he said, "There are those who pray for an economic crisis. Those who dream of adding to their wealth [in an economic crisis] won't be able to do so."
Markets received news of Davutoglu's departure as yet another political uncertainty; the Istanbul stock market lost 8% of its value in one week. The dollar exchange rate, which was $1 to 2.80 Turkish liras on May 4, climbed to 2.97 Turkish lira in one day. It was the first time since 2001 that the markets were so negatively affected by an apparent rift between the president and the prime minister.
