Shares on the Istanbul stock exchange dropped 1.3 percent on Monday, closing at 42,710 points, after Türkiye's president blocked the government's pick for Central Bank governor. The decline followed a 2.8 percent loss the previous Friday, as markets grew anxious over the leadership vacuum.
President Ahmet Necdet Sezer, a committed secularist, rejected the ruling party's nominee, Adnan Buyukdeniz, who headed AlBaraka Turk, an interest-free bank established with Arab capital. Investors worried that the government, which has Islamist roots, was seeking a governor who would be too deferential to the cabinet, weakening the bank's independence.
The position has been filled temporarily since 14 March, when former governor Sureyya Serdengecti ended a five-year term during which inflation fell to single digits for the first time in 30 years under an IMF recovery program.
Economy Minister Ali Babacan sought to calm markets by reaffirming the government's commitment to a floating exchange rate and fiscal discipline. Prime Minister Recep Tayyip Erdogan, downplaying the turmoil, said a new nomination would follow his return from Sudan later that week.
Analysts noted that recent government moves, including tax cuts for the textile sector and public salary increases, had already raised concerns about compliance with Türkiye's 10-billion-dollar IMF standby agreement.
Historical summary. TurkishPress restated this wire report, first published in March 2006, in its own words.