With Turkey never far from a headline that suggests it’s set for a financial implosion, newly appointed finance minister Mehmet Simsek has his work cut out trying to persuade international investors to return to a country where so many have had their fingers badly burned.

On the one hand, Turkey is desperate for quick capital inflows, on the other it has a re-elected president, Recep Tayyip Erdogan, who’s famous for peculiar monetary and other economic policies that tend to trigger panicky outflows. So the global markets want to be damn sure that it’s Simsek—a former Merrill Lynch regional chief economist in London who’s on his second stint as Erdogan’s financial czar—who’s in control and not the strange strongman.

Simsek knows his immediate priority is strengthening his ministry’s team and designing a credible programme. On June 8, Simsek (@memetsimsek), who was appointed as finance minister six days earlier, blew some kisses to investors, sending out an English-language tweet. “Our guiding principles… will be transparency, consistency, accountability and predictability,” he wrote.

He also affirmed his commitment to rules-based policy making to enhance said predictability. There are no short cuts or quick fixes, he avowed.

In Turkish-language tweets, Simsek asked for patience and time. “Please do not trust any news or rumours that you have not heard from me regarding our practices and policies,” he wrote.

The tweets amounted to the first communication to the outside world by Simsek since he said on June 4 during the ceremony for Erdogan’s new cabinet: “Turkey has no alternative but to return back to rational ground. A rule-based Turkish economy would help us reach long-awaited prosperity.”

Fifty-six-year-old Simsek’s a veteran pro by now. He knows the keywords, the buzzwords and the jargon, and he knows the required steps to attract hot money inflows. Analysts don’t know if he’s convinced Erdogan to hike rates. Does he know?

Speculation suggests that Hafize Gaye Erkan, a finance industry professional who served as co-CEO at First Republic Bank in the US, will be appointed central bank governor. The incumbent, Sahap Kavcioglu, remains in his post, however.

To recap, the Erdogan regime needs those hot money inflows. To play ball, the finance industry is demanding a chunky lira devaluation in advance as well as a shock policy rate hike further down the road.

In the bargaining for the devaluation, 25 and 27 to the dollar are among the numbers regularly talked of for the USD/TRY pair, while a benchmark rate of 25% has been suggested by some investment banks as the figure Turkey’s next rate-setting meeting should go for.

Prior to Simsek’s appointment, the visible impacts of the overvalued lira on the real economy and the gaping trade deficit suggested that a devaluation was inevitable.

In such a case, an ongoing controlled devaluation will continue until the first monetary policy committee (MPC) meeting. Then, a front-loaded rate hike will open the doors for a flood of hot money. If a 30-40% USD-denominated return in a few months of maturity is on the table via government lira papers, it will be hard for the finance industry to say No.

If the rate hikes are delivered gradually, then the portfolio inflows will be limited. The finance industry will hold back until the policy rate reaches its peak.

The next rate-setting meeting is scheduled for June 22. The key rate currently stands at 8.5%. For May, the Turkish Statistical Institute (TUIK, or TurkStat) released official consumer price index (CPI) inflation at 39.59% y/y.

After delivering a front-loaded hike that would bring the policy rate to above 20%, the central bank could argue that the hike will bring official inflation to below the policy rate. Given that the TUIK will be expected to deliver the required inflation figures, there’ll be a guarantee that more rate hikes would not be a risk.

On June 8, the USD/TRY rate in the interbank market remained in the 23s after posting a 6% d/d jump a day ago. A new record high of 23.56 was registered on June 7.

Free market prices at the Grand Bazaar in Istanbul were also hovering in the 23s. Lately, the gap between the interbank and the Bazaar rates has narrowed with the government allowing the lira to depreciate in the interbank market.

Turkey’s FX market has long been marked by its lack of free status. The Erdogan regime has been controlling the interbank market via government-run banks.

Amid the booming lira supply and hard currency outflows via unprecedented trade deficits, officials have only managed to keep something of a grip on the lira by strong-arming bankers into blocking (non-capital controls) and suppressing (macroprudential measures) domestic FX demand. Also supportive are those unidentified inflows and other assistance from “friendly countries”.

The Turks, meanwhile, terrified of the lira, have been piling up cryptocurrency, cars and gold. The KKM FX-protected deposits scheme rose to TRY 2.53 trillion as of June 2 from TRY 2.5 trillion as of May 26 while the USD-denominated amount declined to $122bn from $125bn thanks to the lira depreciation.

Prior to June 1, local banks were offering interest payments in advance for conversions from FX-linked deposits to the KKM. Some 30-40%s for advance payments were pronounced, meaning that the banks were depositing $300,000 in advance in accounts converting $1mn worth of FX-linked deposits to the KKM. The central bank scrapped the advance interest payments as of June 1 as pre-election pressure on the USD/TRY was lifted.

To help break FX demand, the government has also permitted local banks to introduce higher lira deposit rates. As of May 26, the weighted average lira deposit rate with maturities of up to three months reached 34%.

As of June 2, the KKM accounts for 24% of total deposits. The share of FX-linked deposits stands at 41%, up from 39% a week ago due to the lira depreciation. As of June 2, overall dollarisation stood at 65%.

The central bank’s net FX reserves are in negative territory for the first time in 21 years. A fresh record low was registered at minus $6bn on June 2. As a result, net reserves excluding swaps (swaps are off-balance sheet items, thus it is necessary to exclude swaps from balance sheet positions to reach actual figures) hit  a fresh record low of minus $61bn.

The gross reserves rose to $101bn from $98bn as of May 26. The figure stood at $130bn as of February 3.

Sentiment on the global markets remains turbulence-free. Turkey’s five-year credit default swaps (CDS) are moving around the 500-level, while the yield on the Turkish government’s 10-year eurobonds was around the 9%-level.

On May 24, unnamed sources told Bloomberg that Turkey’s central bank asked some local lenders to buy the country’s dollar bonds to prevent a CDS spike.