Marcus Ashworth, Columnist

Erdogan's Election Stumble Troubles the Lira

The ruling party’s defeat in major cities seems to have delayed the return to normal in financial markets.

April 1, 2019 at 11:12 AM UTC

Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. Previously, he was chief markets strategist for Haitong Securities in London.

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Sunday's municipal elections in Turkey marked a resounding rejection of President Recep Tayyip Erdogan's ruling AK party in the nation’s big cities. The political fractures may make it harder for the lira to recover recent lost ground.

The currency weakened by as much as 2.3 percent on Monday. What is most troubling is what accompanied that fall: a spike in overnight rates to as much as 300 percent. This suggests the screws are getting turned again in bank funding markets, and the flight from the currency continues.