By Tulay Karadeniz
ANKARA (Reuters) - Turkey's governing AK Party nominated its low-profile defence minister for parliamentary speaker on Friday, in a sign it could be willing to cede the post to the opposition in return for a deal to form a coalition government.
In picking Ismet Yilmaz, the AKP opted for a veteran backbencher lacking the name recognition of the rival Republican People's Party (CHP) candidate, Deniz Baykal, a former head of the party and parliament's oldest deputy.
"The most important thing that strikes us about Ismet Yilmaz is that he is not a high-profile candidate," said Inan Demir, chief economist at Finansbank.
"This makes us think that the AKP may be amenable to a compromise with opposition parties, whereby potential junior coalition partner gets the post of the parliament speaker."
The lira currency hit a three-week high on Thursday on hopes the Islamist-rooted AKP could forge a grand coalition with the CHP, long the party of the secular business elite.
The AK Party, founded by President Tayyip Erdogan, emerged as the biggest party from a June 7 election but lost the overall majority it had enjoyed for more than a decade.
Prime Minister Ahmet Davutoglu said on Friday that any coalition talks would only begin after Erdogan had mandated him to form a government, once the speaker was elected.
"The subject of the parliament speaker is not a part of the coalition talks," he told reporters after announcing Yilmaz's candidacy.
If Davutoglu fails to form a government, Erdogan could then ask the CHP to try to establish a working government.
The first two rounds of voting on the post of speaker are scheduled on Tuesday, with candidates requiring the support of at least 367 MPs in the 550-seat assembly in those two votes.
In a third round of voting on Wednesday a minimum of 276 votes is needed. In the fourth and final round the candidate with the most votes will be elected speaker.
Dengir Mir Mehmet Firat of the pro-Kurdish HDP and former presidential candidate Ekmeleddin Ihsanoglu for the nationalist MHP, are also running for speaker.
AKP officials have privately said Erdogan may see a snap election as the best way for the AKP to restore its majority and secure constitutional changes giving him greater power.
However, a survey this week by pollsters Metropoll showed support for AKP stood at 41.6 percent, compared to the 40.7 percent it received at the election, a level unlikely to secure an overall AKP majority.
Media reports on Friday said another Metropoll survey showed Erdogan's approval rating had dipped to 37.5 percent in June, around half its 2011 level of 71.1 percent and down from 47.4 percent before he took over as president last August.
(Additional reporting by Nevzat Devranoglu; Writing by Daren Butler and David Dolan; editing by Jon Boyle)
