Arab Today, arab today turkey investors take fright at postpoll uncertainty
Last Updated : GMT 05:46:22
Arab Today, arab today
Arab Today, arab today

Lira hitting a new record low against the dollar

Turkey investors take fright at post-poll uncertainty

Arab Today, arab today

Arab Today, arab today Turkey investors take fright at post-poll uncertainty

Turkish shares tumbled over five% and lira hit a new record low against dollar
Istanbul - Arab Today

Investors in Turkey on Monday took fright at a new period of political uncertainty after legislative elections, with shares tumbling over five percent and the lira hitting a new record low against the dollar.

Turkey's central bank acted swiftly to give some support to the pressured Turkish lira, saying it was pruning its short term foreign exchange deposit rates effective Tuesday.

The Istanbul stock exchange's BIST 100 index plunged 5.0 percent while the Turkish lira lost 3.8 percent to trade at 2.76 to the dollar.

The lira earlier broke through the 2.8 lira level against the dollar for the first time.

The Justice and Development Party (AKP) won the biggest portion of the vote in Sunday's legislative poll but came well short of an absolute majority in parliament for the first time since it came to power 13 years ago.

The situation has created huge political uncertainty, with a coalition, early elections and a minority government all seen as possible outcomes.

The result also wrecked President Recep Tayyip Erdogan's plan to agree a new constitution to create a strong presidency with him at the top.

"The election outcome failed to clarify uncertainties in Turkish politics," said Ozgur Altug of BGC partners in Istanbul. "Until the formation of the new government, uncertainty will continue."

Fitch Ratings said the inconclusive result "increases near-term political uncertainty and may aggravate tensions regarding economic policy."

The central bank said the foreign exchange deposit short term interest rate has been reduced from four percent to 3.5 percent for dollar deposits and from two percent to 1.5 percent for those in euro.

The decision was due to "recent global and local developments", it said, in an apparent reference to the domestic situation.

The move only had a limited impact on the currency's value but appeared to help it keep earlier losses in check.

- 'Turkey most vulnerable EM' -

The AKP had been lauded in its early years in power for driving Turkey to new levels of growth and prosperity with pro-reform policies.

It has prided itself on its reputation for ensuring financial and political stability after coming to power in the wake of the 2000-2001 financial crisis when the country came close to economic meltdown.

But the election has come against the background of growing concern for the Turkish economy, with growth slipping under three percent in 2014, inflation still high and unemployment ticking up.

Markets had been rattled earlier this year by Erdogan's leanings towards populist economic policies and a standoff with the central bank over interest rates.

William Jackson, economist at Capital Economics in London, said that the uncertainty added to an "ugly mix" of problems, including "rampant inflation, a large current account deficit, and a rapid increase in private sector debt".

"Turkey is perhaps the most vulnerable of any major emerging market at this time," he said in a research note.

There is a long list of outstanding reforms in Turkey, including improving the low domestic savings rate, upping the participation of women in the economy and reducing informal employment.

Standard and Poor's said implementation of reforms "will depend on key cabinet appointments and whether the AKP will choose to form a coalition."

Michael Harris, Turkey equity strategist at Renaissance Capital, however said that while Turkish assets "might well wobble" in the short term, a credible coalition could be good for Turkey.

"We believe a functioning coalition will go a long way to reducing the medium term market and economic risks associated with a consolidation of president Erdogan's power," he said.

Erdogan's plan for the the AKP to grab a thumping majority so he could tighten his control by creating a presidential system had also worried markets.

"A coalition is not something to be afraid of," said Harris.
Source: AFP

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today turkey investors take fright at postpoll uncertainty Arab Today, arab today turkey investors take fright at postpoll uncertainty

 



Arab Today, arab today
Arab Today, arab today Fadi Kataya explains secrets of  Nancy Ajram's newlook
Arab Today, arab today Messi visit will contribute in tourism

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism
Arab Today, arab today Expresses Algerian history by woody figures

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures
Arab Today, arab today Mental conflict endures

GMT 07:36 2017 Friday ,24 February

Mental conflict endures

GMT 11:26 2017 Wednesday ,22 February

Dutch corporate takeover defences tough to breach

GMT 11:14 2017 Wednesday ,22 February

Lloyds Banking Group posts surging profits

GMT 10:01 2017 Tuesday ,21 February

Egypt pound rebounds from flotation slide

GMT 09:57 2017 Tuesday ,21 February

Greece agrees to bailout reforms compromise

GMT 09:55 2017 Monday ,20 February

Thailand 2016 growth up but below junta target

GMT 09:29 2017 Monday ,20 February

Kraft Heinz withdraws bid for Unilever

GMT 09:22 2017 Monday ,20 February

China's huge debt poses big headache for central bank
View News in Arabic - Business: أخبار الأعمال
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Nissan enhances sales in most markets

GMT 14:08 2017 Monday ,20 February

Nissan enhances sales in most markets
Arab Today, arab today Wafaa Amer is happy for Sherihan’s return

GMT 07:36 2017 Wednesday ,22 February

Wafaa Amer is happy for Sherihan’s return
Arab Today, arab today Milan laughs while Rome cries

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 05:19 2017 Tuesday ,21 February

Salma Rashid happy for 'A Whisper of Love'

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries

GMT 15:53 2017 Tuesday ,21 February

Small ponds have outsized impact

GMT 20:33 2017 Friday ,17 February

To release new antiques collection

GMT 07:51 2017 Wednesday ,22 February

Mom's immune system accepts babies

GMT 09:59 2017 Monday ,20 February

Tourism shows signs of recovery

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 20:02 2017 Tuesday ,21 February

Nohan Seyam designs beautiful accessories
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday