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Turkish lira swings wildly after Erdogan’s party suffers pivotal election losses

Turkish lira swings wildly after Erdogan’s party suffers pivotal election losses
The Turkish national currency suffered losses Monday before recovering slightly after President Erdogan’s AK Party saw election losses in big cities, including capital Ankara.

The lira extended losses from last week and plunged nearly 2.5 percent at the opening of trade. Later in the day, the currency recovered from some of its recent losses.

Meanwhile the country’s main stock index, BIST 100, was down 0.59 percent on Monday, after falling more than 7 percent last week.

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The Turkish lira lost nearly 30 percent of its value against the dollar last year, triggering a recession and soaring inflation. Last week, it was weakening sharply as the government and central bank unleashed a series of measures to prop up the lira.

“Doubt markets will take much direction from these results which are mixed for AKP. The underlying issues remain - lack of confidence as reflected in rising dollarization,” emerging markets strategist at Bluebay Asset Management, Timothy Ash, said in a Twitter post.

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Sunday’s municipal election was carefully followed as it was considered to be a vote on Erdogan’s presidency. Despite his ruling coalition winning over 50 percent of the national vote, according to preliminary results, it lost Ankara for the first time in many years and nearly lost control of the biggest city, Istanbul, where both ruling and opposition parties declared victory.

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