Turkish Lira Falls After Erdogan Wins
Turkey’s lira weakened toward a record low after Recep Tayyip Erdogan won a presidential runoff election!
In doing so, Erdogan extended his time as the nation’s longest-serving leader in a tenure that has increasingly alienated foreign investors.
Tweet on turkish lira inflation
Turkish Lira Falls After Erdogan Wins!
Turkey’s lira weakened toward a record low after Recep Tayyip Erdogan won a presidential runoff election.#inflation #TurkishElections #Currency pic.twitter.com/eHHkNdUoy7— The_Journalbiz (@the_journalbiz) May 30, 2023
Bloomberg tweet on Turkish lira inflation
Stocks jumped and dollar bonds were mixed on Monday as investors awaited the appointment of a new economic team that he promised would have “international credibility,” hinting at a potential turn away from an unorthodox policy mix based on ultra-low interest rates and heavy state intervention in markets.
- The lira fell 0.6% to 20.10 per US dollar as of 6:10 p.m. in Istanbul, a record low on a closing basis.
Wall Street analysts see more weakness ahead, with Morgan Stanley warning it may slide 29% toward 28 per dollar by the end of the year should Erdogan decline to change course
“An Erdogan win offers no comfort for any foreign investor,” said Hasnain Malik, a strategist at Tellimer in Dubai. “With very high inflation, very low interest rates, and no net foreign reserves, a painful crisis affecting all assets could be on the way.”
The policies have also been expensive, with the central bank spending nearly $200 billion over the past year and a half to prop up the lira, net foreign-exchange reserves turning negative, and inflation soaring above 80% last year before falling to 44% in April.
