Erdogan's Victory In Elections Brought Down Turkish Lira

The Turkish national currency has fallen to a record low.

After Turkish President Recep Tayyip Erdoğan won the second round of presidential elections, the Turkish lira has significantly weakened.

According to Bloomberg, The lira dropped 0.3% to 20,03 per US dollar, near a record low

According to the article, analysts explain the collapse of the Turkish currency by the fact that Erdogan's victory forced investors to look for any signs that he will begin to weaken the state's tight control over the markets.

Wall Street believes that the lira will weaken even more. Morgan Stanley warns that it may fall to 26 lira per dollar earlier than previously expected. According to analysts, if Erdogan sticks to his policy of keeping interest rates low, the dollar will be worth 28 lira by the end of the year. Wells Fargo & Co expects the currency to hit 23 by the end of the quarter.

“An Erdogan win offers no comfort for any foreign investors. With very high inflation, very low-interest rates, and no net foreign reserves, a painful crisis affecting all assets could be on the way,” said Hasnain Malik, a strategist at Tellimer in Dubai.