Turkish stocks experienced a rise on Monday, while the lira saw a slight decline, reaching a record low against the dollar after the opposition claimed a significant victory over President Tayyip Erdogan's AK Party (AKP) in the local elections. This political shift comes amidst challenges such as near 70% inflation, slowing economic growth, and high borrowing costs due to an aggressive monetary tightening campaign, all of which have impacted the AKP's performance.
The BIST 100 benchmark stock index opened with a gain of over 1%, with banking shares increasing by 1.7%. By 0730 GMT, the indexes had risen by 0.63% and 2.12%, respectively. Meanwhile, the lira reached a low of 33 against the dollar in overnight trading, with very thin liquidity following the election results, but slightly recovered to 32.43 by 0730 GMT, compared to Friday's close. This occurred while many foreign financial markets were closed for Easter holidays.
Additionally, Turkey's investment risk measure, the five-year credit default swaps, showed a slight improvement, and bond yields experienced a minor decrease. The election results represent a significant setback for Erdogan and his AKP, marking their biggest electoral defeat in over two decades of power. This outcome also strengthens the position of Istanbul Mayor Ekrem Imamoglu as Erdogan's main political adversary.
