Turkey's Lira is slightly weighed on yesterday, which was moving against the last week's rally, as the Russian fighter jet was seen by a military incident, shot down by Turkish forces. This could potentially lead to escalation diplomatically, which involves entire NATO.
President Erdogan might take more control over policy making, as the market fears, which was confirmed through the nomination of the new cabinet yesterday.
Ex-Finance Minister Mehmet Simsek would perform the roles of economic policy head and head of Treasury. He is also known to investors.
"The re-nomination of CBT Governor, Erdem Basci, after his term expires in April 2016, has become unlikely. The overall picture supports our base-case that we are set for strong pro-growth policies from this new cabinet, and a push to lower average interest rates in the economy; bringing down inflation is unlikely to be the primary focus. We see USD-TRY at around 3.20 by end-2016", says Commerzbank in a research note.
