Erdoğan’s slam-dunk election win threatened by lira selloff

By Mark Bentley
May 03 2018

Turkish President Recep Tayyip Erdoğan is the overwhelming favourite to emerge victorious at presidential elections in June, thanks to his record of winning every poll since 2002 and his increasing grip on political and civilian life in Turkey.

But a slump in the lira’s value – the country’s fragile currency hit a new record low against the dollar on Friday – may be exposing him to a serious challenge from opposition figures, who are sure to draw attention to his increasingly questionable record on steering the nation’s economy.

Tim Ash, senior emerging markets strategist at Blue Bay Asset Management in London, said the lira’s decline – amounting to more than 10 percent since the start of the year – could present a real danger for Erdoğan as he seeks a second term in office.

“If the lira continues to sink the message to voters will be that Erdoğan has lost the plot on the economy front,” Ash said. “If we see a period of sustained lira weakness in the run up to the election, then Erdoğan’s chances of winning reduce.”