The Turkish lira has risen sharply after the sudden resignation over the weekend of finance minister Berat Albayrak. In a statement on his Instagram page Albayrak, who is the son in law of President Recep Tayyip Erdogan, cited health and family reasons for his decision to quit.

He has stepped down from government just a day after central bank governor Murat Uysal was sacked, amid a currency crisis during which the lira has lost a quarter of its value this year. Uysal, who had been in the post for 16 months, will be replaced with former finance minister Naci Agbal, who is understood to have clashed with Albayrak on policy issues. 

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The resignation of Albayrak, who had been touted as a possible successor to Erdogan, has raised the stakes for Turkey's ruling Adalet ve Kalkinma (Justice and Development) party at a crucial time. 

The AKP is still recovering from heavy losses in mayoral elections last year. Former prime minister Ahmet Davutoglu and economy minister Ali Babacan have quit to form rival parties. Elsewhere there are suggestions that a new Biden presidency in the U.S. could usher in a chillier climate in relations between Ankara and Washington, with Biden an outspoken critic of Erdogan on a range of issues.   

Fadi Hakura, manager of the Turkey Project at London's Chatham House, told CGTN Europe the current economic problems date from changes made to Turkey's institutions after the switch to a presidential system of governance in 2017. "We now have multiple bodies handling policy, with no clear lines of responsibility," he said. "It's a recipe for conflict."

Despite the uncertainty, the Turkish lira gained almost 7 percent in early trading on Monday, its biggest upward spike in months. The central bank's next policy meeting is due later this month, with economists hopeful a rate rise could dampen inflation, which is running at over 11 percent, twice the bank's target.

"It must be soul destroying as a policy chief that you resign and the market rallies by 6 or 7 percent," Timothy Ash of BlueBay Asset Management told CGTN Europe.

"The market is looking for a hike and ideally the base rate needs to be 15 percent, anything less probably won't work and it's best to get the pain out of the way early," he added.