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The Turkish lira fell against the dollar on Tuesday as President Recep Tayyip Erdogan secured victory in the second round of Sunday's presidential election, entering a third decade of increasingly authoritarian rule.
The lira weakened to 20.065 per dollar in early European trade, breaking the previous record on Friday.
Since the beginning of the year, the Turkish national currency has collapsed by about 7 percent and lost more than 90 percent of its value over the past decade, while the economy is in the grip of cycles of rise and fall and rampant bouts of inflation.
After a currency crisis in 2021, Turkish authorities have engaged in increasingly practical behavior in foreign exchange markets, and foreign exchange and gold reserves have declined.
"Erdogan's victory led to additional pressure on the Turkish lira," said Benjamin Picton, senior macrostrategist at Rabobank. Erdogan has prevailed despite years of economic turmoil, which critics blame on his unconventional economic policies, which the opposition has vowed to undo.
Record decline in the lira
At the same time, stocks rose as the BIST-100 index rose 3.5 percent and the banking index rose more than 1 percent. The share of foreign asset managers owning Turkish shares has declined in recent years and the market is led mainly by local investors.
"Erdogan's victory offers no reassurance to any foreign investor," said Hasnain Malik, head of capital research at Tellimer. "Only the most optimistic would hope that Erdogan now feels secure enough politically to return to orthodox economic policy," he said.