Economist Timothy Ash on the Mehmet Şimşek scenario: If he leaves, a systemic crisis is very likely

In recent days, allegations had surfaced suggesting that Treasury and Finance Minister Mehmet Şimşek intended to resign.

Following the allegations, the Borsa Istanbul BIST 100 Index closed Friday with a 2.55 percent loss, finishing at 9,668.10 points.

While the Ministry and Mehmet Şimşek denied the claims, the Capital Markets Board (SPK) also announced that necessary legal actions and investigations have been initiated against those who produced and spread intentional and misleading news that caused unusual price and volume movements.

Renowned British economist Timothy Ash wrote about the economic scenarios that would unfold if Mehmet Şimşek were to leave his post.

'A SYSTEMIC CRISIS IS VERY LIKELY'

Economist Ash noted the following on his X account:

"To be clear, if Şimşek resigns/is fired, all of the over 20 billion dollars in portfolio inflows seen last year will exit, accompanied by accelerating dollarization, a massive loss of foreign exchange reserves, and another major devaluation. A systemic crisis (banks, BoP, and public debt) is very likely.

If Turkey does not remain committed to orthodox economic policies, the Gulf money still waiting to invest in Turkey will not come; because for them, at the very least, reliable macro policies are needed."

News Source: 12punto