SHAFAQNA- Türkiye’s lira weakened toward a record low after Recep Tayyip Erdogan won a presidential runoff election.
Stocks jumped and dollar bonds were mixed on Monday (29 May 2023) as investors awaited 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.
Erdogan is expected to announce his new cabinet as soon as Friday, according to two Turkish officials familiar with the matter.
The lira fell 0.6% to 20.10 per dollar as of 6:10 p.m. in Istanbul, a record low on a closing basis. Wall Street analysts see further weakness ahead, with Morgan Stanley warning it could fall 29% to $28 by the end of the year if Erdogan refuses to change course. Wells Fargo & Co expects the currency to reach 23 by the end of the quarter.
Source: bloomberg