Turkish President Recep Tayyip Erdogan’s Justice and Development Party (AK Party) has lost the capital Ankara and looks set to lose the commercial hub of Istanbul after 25 years in power in both cities, as Sunday’s municipal election results — largely seen as a referendum on the president himself — roll in.
Turkish lira fell sharply at the opening of London trade on Monday, the latest rout after a turbulent week that saw Turkey’s overnight swap rate shoot up as high as 1,200 percent as the central bank tried to shore up the currency.
On Monday morning, the lira sunk at roughly 8:30 a.m London time after the country’s election board said the opposition party was ahead in Istanbul’s mayoral election, briefly trading at $5.6913. The currency had traded at 5.61 to the dollar after the initial results came in on Sunday evening, compared with 5.55 at Friday’s close.
The country’s BIST 100 stock index was down 1.65 percent as European markets opened, after falling more than 7 percent last week.
Markets now fear that the electoral losses will push Erdogan to double down on populist policies that helped send the currency tanking last year, when his interference in central bank independence held interest rates down despite soaring inflation and sent investors running for the hills. Last year saw the lira lose 30 percent of its value against the dollar.
The victories claimed by the opposition Republican People’s Party (CHP) are a formidable blow to the ruling right-wing AK Party — particularly the expected loss of Istanbul, where Erdogan first made his political debut as city mayor in the 1990s. Still, the AK Party and its far-right coalition partner the Nationalist Movement Party (MHP) secured more than 50 percent of the national vote and won a majority of Istanbul’s districts.
from News fore today https://ift.tt/2uAaQCJ
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