Turkish stocks up, lira declines after election results

Turkish stocks rose on Monday, and the lira fell slightly after reaching its lowest levels ever against the dollar in the wake of the opposition’s significant victory over the Justice and Development Party led by President Recep Tayyip Erdogan in the local elections.

According to Reuters, analysts said that the inflation rate close to 70 percent, the slowdown in economic growth, and the strong monetary tightening campaign that raised borrowing costs hurt the results of the Justice and Development Party on Sunday.

The benchmark BIST 100 index rose more than 1% at the opening, and the banking stock index rose 1.7%. At 0730 GMT, the two indexes rose 0.63% and 2.12%, respectively.

The lira briefly touched the level of 33 against the dollar in Sunday night trading amid very weak liquidity, following the election results.

At 0730 GMT, the price reached 32.43, which is slightly below Friday’s closing level. Many global financial markets are closed on Monday for the Easter holidays.

Turkey’s five-year credit default swaps, a measure of investment risk, fell, and bond yields also fell slightly.

The nationwide results represent the biggest electoral blow to Erdogan and his party in more than two decades in power.