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Business

Turkish lira, stocks up after AKP election win

Turkish investors have breathed a sigh of relief after Sunday's election victory for the conservative Islamic AKP party lifted the country's main stock index and its flagging currency in trading on Monday.

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Turkish lira surges after election

After Turkish President Recep Tayyip Erdogan's Justice and Development Party (AKP) was handed a mandate of one-party rule by voters on Sunday, the value of the Turkish lira rose by 3 percent against the euro and the greenback respectively, and the main stock index, the BIST, jumped 5.5 percent in late afternoon trade.

The election did not spell a likely end to political divisions in society, as roughly half of the population voted against the AKP, but it was enough for Erdogan's conservative Islamic faction to receive 316 seats in parliament, or an absolute majority.

Investors hoped the vote would end months of instability after an inconclusive vote in June triggered a breakdown in the Kurdish peace process and the future of the country's once lustrous economy was called into question.

Analysts said the lira could now strengthen after having shed more than 25 percent of its value since the beginning of the year.

"This election will end Turkey's period of transition, and should lead to a marked strengthening of the country's economy," Valeria Bednarik, an analyst with FXstreet, wrote in a note to investors.

Turkey's once-robust economy was one of Erdogan's principle accomplishments, but last year growth slid to less than 3 percent - down from levels around 10 percent just five years ago.

Markets were jarred after the June vote failed to produce a working government, but a return to one-party rule would likely assuage investors, at least in the short term, as the government would have an easier time pushing through its own economic policies and a budget.

cjc/ng (AFP, dpa)

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