Turkish lira falls as Erdogan sworn in, names son-in-law finance minister

ISTANBUL — Turkey’s President Recep Tayyip Erdogan took up a new mandate with vastly expanded powers on Monday, and vowed to use his broadened authority to position his nation as a driving force linking East and West — a gambit that will face an immediate test at a NATO summit.

The Turkish leader, who won re-election and secured a majority in parliament last month, took the oath of office before kicking off his new term with a ceremony at Ankara’s sprawling presidential palace.

In his speech, Erdogan said he would aim to turn Turkey into one of the world’s top 10 economies, a quantum leap from the country’s 17th rank last year. Turkey faces immediate challenges in stabilizing its currency, weakened by double-digit inflation and pledges by the president to keep central-bank interest rates low.

A decree published Monday lifted limitations to the mandate of the central bank governor furthered expectations that Erdogan would seek to play a bigger role in defining monetary policy, as he said he would during the election campaign. The appointment as treasury and finance minister of Berat Albayrak, Erdogan’s son-in-law — a little-known figure in financial circles — as well as the departure of foreign investors’ favorite Mehmet Simsek from the cabinet, could also intensify downward pressure on the Turkish lira, analysts said. The lira USDTRY, -0.1352%  dropped 3% against the dollar in late Monday trading, changing hands at 4.71.

An expanded version of this report appears on WSJ.com.

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