Lira, who lost in this year about 20% of its value against the U.S. dollar on concerns about overheating of the economy, rose 2% to 4.58 per dollar. I must say that the growth of the national currency of Turkey is held for the fourth day and is the longest gain in two months, writes Ahval.
Recall that Erdogan won the presidential elections, gaining 52.5 per cent of votes. His nearest rival, Muharrem ince, representing the left Republican people’s party (CHP), was supported by 30,7 % of the voters. The coalition of the ruling AKP and the nationalist movement Party (MHP) received 343 seats in Parliament, consisting of 600 people.
The result of the vote had a positive effect on the markets, since it nullified the chance of a second round between Erdogan and inje-gun in two. The rule of Erdogan and his party accused the opposition and human rights groups in harsh violation of democratic principles in Turkey in recent years, will also be partially restricted the IPA, said Tim ash, senior strategist for emerging markets at BlueBay Asset Management in London.
“I think the fact that the second round of presidential elections will not be having a positive impact on the market, and the risks of an early election is now negligible. Thus, the new team of the AKP, the MHP can quickly shift to the many economic problems facing the country. We don’t know how long it will last market uncertainty. But the politicians can handle it,” said ash.
In addition, on the eve of elections in Turkey, the Lira fell to record lows against the dollar as concerns regarding the overheating of the economy, growth reached 7.4% last year. In may, Erdogan promised to reduce interest rates and take control of monetary policy in case of his election victory. The statements of the President have raised concerns with investors who are encouraged to raise rates. The Central Bank of Turkey in may and June increased the benchmark interest rate by 425 basis points to 17.75% in order to reduce the drop in the Lira.
According to ash, the investors want to see greater participation in the economic issues of the team members of Erdogan as a former economist of the London branch of Merrill Lynch and Deputy Prime Minister Mehmet Simsek, and the senior Advisor to the President of Hatice Karahan who hold more traditional views.
In the case of winning the election Erdogan’s government also promised to lift the state of emergency in Turkey, acting after a failed attempt of coup d’état in July 2016. After the coup foreign investment in the country declined sharply and the Lira exchange rate fell against all major currencies since the government started repression against tens of thousands of his opponents and continued the war against Kurdish militants in Syria and Iraq.
I must say that after elections Erdogan will receive unprecedented extensive Executive powers under the new presidential system adopted at the national referendum held last year. This system will replace the parliamentary democracy and abolished the post of Prime Minister. https://ahvalnews.com/turkish-lira/turkish-lira-jumps-after-erdogan-election-clean-sweep