Turkey’s ex-finance czar Mehmet Simsek joined a campaign event with Recep Tayyip Erdogan on Wednesday, adding to speculation that he’ll be tapped to restore credibility among investors should the president win this week’s elections.
(Bloomberg) — Turkey’s ex-finance czar Mehmet Simsek joined a campaign event with Recep Tayyip Erdogan on Wednesday, adding to speculation that he’ll be tapped to restore credibility among investors should the president win this week’s elections.
The pair were spotted at a ceremony marking the opening of a religious facility in Simsek’s hometown of Batman in Turkey’s southeast. Erdogan held a rally in the province earlier on Wednesday.
With a cost-of-living crisis rattling his popularity ahead of May 14 elections, Erdogan has called on Simsek, who is considered a market-friendly figure, to lead an overhaul of economy policy.
Simsek rejected Erdogan’s offer to return to “active politics” after a meeting in March, citing work commitments in London, but Erdogan later said he was coordinating a team developing economic policies for after the vote.
Simsek has not publicly denied or confirmed this role. However, his return could signal a pivot to orthodox policies, which investors have long been calling for.
In contrast to Erdogan’s fixation on ultra-low borrowing costs that have bolstered growth but pushed inflation to a 24-year high, Simsek has a more conventional approach and credibility among investors.
Erdogan Hints at Economic Policy Shift With Ex-Czar’s Return
His departure in 2018 coincided with Turkey’s transition to an executive presidency that gave Erdogan expansive powers and raised concerns about the country’s democracy.
Erdogan used those powers to tighten his grip on economic policymaking. His push for lower interest rates hit the currency hard and prompted an exodus of foreign investors.
Bloomberg Economics expects Turkey to reverse course after the elections, regardless of the outcome, saying that the country’s position as a global outlier is unsustainable as other central banks tighten.
The new government will also have to reduce a bulging trade deficit, cut external debt and replenish depleted foreign currency reserves.
Yet despite signaling a policy shift with the potential return of Simsek, Erdogan has so far ruled out raising borrowing costs.
“As long as this brother of yours is in power, interest rates will not be raised,” he said.
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