President Erdogan subsequently called a snap presidential and parliamentary election on June 24, 2018 in which he emerged victorious with a 52.6 percent first round majority vote to become Turkey's first executive President under the new constitution.
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.
President Muhammadu Buhari has congratulated his Turkish counterpart, Tayyep Erdogan, on his re-election and said he looked forward to the strengthening of relations between the two countries.
Erdogan narrowly won a referendum a year ago to replace his country's parliamentary democracy with a system featuring an all-powerful presidency, and followed that with a hard-fought election victory last month to the newly strengthened post.
It allows him to appoint ministers and vice-presidents and intervene in the legal system. He also promised to "leave behind a system that cost the country heavily because of the political, social and economic chaos it caused in the past", according to Hurriyet Daily News.
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, 64, says a 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".
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. He vowed to "remain loyal to the rule of law, to the democratic and secular republic, and to Ataturk's principles and reforms".
Erdogan took the oath of office on Monday in the Turkish parliament, where he vowed that he would make the right use of the sweeping powers he won in a referendum previous year and sealed in a hard-fought re-election victory two weeks ago.
Erdogan will this week immediately turn to foreign policy, visiting northern Cyprus and Azerbaijan, followed by more challenging encounters at a North Atlantic Treaty Organisation summit in Brussels where he will meet US President Donald Trump and other leaders.
In a signal of those differences, 22 heads of state were scheduled to attend the inauguration, but none from western powers such as the US, Germany, France or the UK.
"We, as Turkey and as the Turkish people, are making a new start here today", he told the dignitaries and thousands of guests.
Erdogan referred to the principles of Mustafa Kemal Ataturk, the founder of the modern Turkish Republic.
The Turkish lira lost 3.5 per cent in value on the news to trade at 4.73 lira to the dollar. Hulusi Akar was appointed as Minister of National Defense with the same decree, which was announced by President Recep Tayyip Erdoğan on July 9. Erdogan is expected to name a streamlined cabinet of 16 ministers on Monday evening after a ceremony at the presidential palace for more than 7,000 guests, including Venezuelan President Nicolas Maduro, Russian Prime Minister Dmitry Medvedev and Sudan's President Omar Hassan al-Bashir, who is wanted for war crimes by the International Criminal Court.