Tayyip Erdogan inaugurates Turkey's powerful executive presidency

Erdogan acquired 52.5 percent of the votes in the presidential election on June 24

Erdogan acquired 52.5 percent of the votes in the presidential election on June 24

The president will sit at the top of a vertical power structure marked by a slimmed-down government with 16 ministries instead of 26 and multiple bodies reporting to him.

Presidential aide Ibrahim Kalin said Erdogan would visit the mausoleum of Turkey's founder, Mustafa Kemal Ataturk, following the swearing-in ceremony.

"The pace at which he (Erdogan) is moving to tighten his grip is alarming and, in response, Turkish financial assets have come under pressure", said Jason Tuvey, senior emerging markets economist at Capital Economics, in a note to clients.

The appointment of Erdogan's son-in-law "will worry a number of investors and some of the markets, because they didn't much enjoy dealing with Albayrak when he was the energy minister", Peter Westmacott, who served as former British ambassador to Turkey from 2002 to 2006 told CNBC. The government's vow to end the state of emergency is a "meaningless development" because the new presidential system will allow Erdogan to continue to rule by fiat as he's done over the past two years, he added.

He then unveiled the first cabinet under the new system, appointing his son-in-law Berat Albayrak, 40, to the crucial post of finance minister, in a move that appeared to rattle markets.

President Edgar Chagwa Lungu (centre) with his Sudanese counterpart attends the inauguration of Recep Tayyip Erdogan at the Presidential Complex in Ankara, Turkey on Monday, July 9,2018.


Erdogan's supporters see the changes as just reward for a leader who has put Islamic values at the core of public life, championed the pious working classes and overseen years of strong economic growth.

The Turkish lira lost 3.5 percent in value on the news to trade at 4.73 lira to the dollar.

The currency has been battered by concern about Erdogan's drive for lower interest rates and comments he made in May saying he planned to take greater control of the economy after the June 24 elections.

On the eve of Monday's inauguration authorities dismissed more than 18,000 state employees - majority from the police and army - in what the government said would be the final decree under emergency rule imposed following a failed 2016 coup. "In other words, Turkey will be an institutionalized autocracy". An adviser to Erdogan later said that the governor's term would remain at five years.

The introduction of the new presidential system marks the biggest overhaul of governance since the republic was established on the ruins of the Ottoman Empire almost a century ago. In the evening, he'll mark the inauguration of the presidential system at a grand reception attended by foreign dignitaries, before unveiling the members of a cabinet expected to be pared to 16 positions from the current 27. He was taken hostage during the night of the failed military coup in July 2016, which was blamed on US-based opposition cleric Fethullah Gulen. Inflation surged last month above 15 per cent, its highest level in more than a decade, even though the central bank has raised interest rates by 5 percentage points since April.

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