President Erdogan has packed his new cabinet with arch-loyalists including a family member, a childhood friend and an army chief who stood by him on the night of the coup attempt, in a clear sign that he intends to fully exercise the expanded powers handed to him under Turkey's reformed constitution.
Erdogan's restructuring is the most significant adjustment of the country's political system since the formal establishment of modern Turkey, which supplanted the shattered remains of the Ottoman Empire.
The lira, which is down just under 20 percent so far this year, had gained earlier in the day.
"Erdogan, 64, says the new, powerful executive presidency is vital to drive economic growth, ensure security after a failed 2016 military coup and safeguard Turkey from conflict across its southern border in Syria and Iraq". But he's also overseen a strong economy and he has built up considerable support across the country.
Erdogan will face immediate challenges posed by an imbalanced if fast-growing economy and foreign policy tensions between the West and Turkey, a North Atlantic Treaty Organisation member. An adviser to Erdogan later said that the governor's term would remain at five years.
Speaking to journalists after the ceremony, Erdogan said: "Everything was good in front of the nation, I hope it will be better in the future".
"Our dear President decided and found it important to attend an inauguration ceremony in Ankara, Turkey, a ceremony which is characterised with merrymaking such as drinking wine and other both intoxicating liquor and softies, dancing and making toasts".
"Most powers will be concentrated in his hands, there will no longer be a prime minister, and nearly none of the checks and balances of liberal democracies will be present".
The Turkish lira lost 3.5 percent in value on the news to trade at 4.73 lira to the dollar.
Turkish Prime Minister Binali Yildirim will on Monday go down in history as the 27th and final holder of a post that has existed since Mustafa Kemal Ataturk founded modern Turkey, and whose origins date back to the Ottoman Empire. "In other words, Turkey will be an institutionalized autocracy".
Hours after he was sworn in with sweeping new powers at a ceremony in the capital of Ankara late on Monday, Erdogan named Berat Albayrak as treasury and finance minister.
Investors were waiting to see whether cabinet appointees would include individuals seen as market-friendly, and particularly whether Mehmet Simsek, now deputy prime minister, would continue to oversee the economy.
In the aftermath of the 2016 coup, Turkey, a member of the North Atlantic Treaty Organisation military alliance and still nominally a candidate to join the European Union, has detained some 160,000 people, jailed journalists and shut down dozens of media outlets. Erdogan is expected to announce his Cabinet on Monday evening.
The lira has been battered by concern about Erdogan´s drive for lower interest rates and by comments in May that he planned to take greater control of the economy after the June elections.
After winning 52.9 percent of the vote in Turkey's presidential election two weeks ago, Erdogan was granted the ability to call additional elections, appoint judges without parliamentary approval, dissolve Parliament, and issue decrees that had previously been reserved for states of emergency.
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