Turkish Energy Minister Fatih Donmez, on Saturday, announced that Turkey began the process of introducing legislative changes for the gas hub project that Russia had suggested, adding that the proposed changes are anticipated to be approved by Turkish President Recep Tayyip Erdogan.

Turkish media reported earlier in the week that Turkey pushed forward the infrastructure projects to transform the country into an international "gas hub" as part of a project in coordination with Russia.

Turkish media reported Thursday that the country's parliament had approved altering the structure of state-owned oil and gas company Botas in order to implement the plan.

Donmez stated last month that legislative changes are necessary for the project's success as it would require parliament's approval.

"We have an opportunity to become an important center of [gas] trade to Eastern European countries. We have taken steps to this end. When our president approves changes to the bill passed by the parliament, new legal measures will be established," the minister told CNN Turk that before adding that "the old law regulated the domestic market. It was more restrictive. With the new law, we have ensured greater freedom."

According to Donmez, Turkey has the capacity to import up to 100 billion cubic meters of natural gas, 60% of which will be used domestically while the remaining 40% is to be exported to neighboring countries.

Erdogan hints at economic policy shift with Simsek’s return

Erdogan announced that former Finance Minister Mehmet Simsek could trigger an economic shift after next month's elections if the ruling party remains in power.

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During an interview for 24 TV on Wednesday, Erdogan said, "We’re preparing to further strengthen our economic policies in the period ahead," adding that "a team under the coordination of Mehmet Simsek, who participated in the economy’s management for years, is making preparations to that end."

The President announced that the Treasury, Finance Ministry, and Central Bank are making preparations. "God willing, after elections, we will bring all of them together and continue our path by fortifying our economic policy." 

Simsek, a former Merrill Lynch analyst, was one of Erdogan's last pro-investor officials who stood up for traditional policies. Erdogan's struggle with a cost-of-living crisis, which is endangering his popularity in the lead-up to the May 14 election, is what prompted the hint at his possible return.

The two met last month in Ankara, stoking speculation that Simsek could take a role in government, but he said he wanted to stay out of active politics.

Economic policy

Simsek was succeeded by Erdogan's son-in-law after leaving office in 2018, and the President exerted heavier influence over the economy's administration. He championed policies that prioritized growth over price stability, prompting an exodus of foreign investors. 

As the Central Bank launched an easing cycle, inflation soared to a 2-year high last year, guided by Erdogan's wish for low borrowing costs. The Central Bank's foreign exchange reserves were also depleted as policymakers try to stabilize the lira. 

Turkey is facing its worst currency crisis since August 2018 when the value of the lira hit historic lows following diplomatic disputes with then #US President Donald #Trump, what is happening to the #TurkishLira?#Erdogan #Turkey pic.twitter.com/rAvTbZyEcu

— Al Mayadeen English (@MayadeenEnglish) December 3, 2021

Incumbent Finance Minister Nureddin Nebati on Monday ruled out a return to orthodox politics after elections, saying in a televised interview, "We say that interest rates will not increase on May 15. There will be no change in our economic policy." 

Wall Street banks like JPMorgan Chase&Co and Goldman Sachs Group Inc expect a sharp reversal in monetary policy after elections, expecting that the benchmark interest rate could spike to at least 30% from 8.5%, according to a Bloomberg survey. 

Read more: 'Any talks should consider Russian legitimate interests, concerns': FM