ISTANBUL: The Turkish lira slid to a three-week low on Tuesday, pummelled again by investor concerns the ruling AK Party may struggle to form a single-party government after June 7 elections.
The lira, one of the worst-performing emerging market currencies this year, has been at the whim of voter opinion polls in recent weeks.
It was initially bolstered last month on forecasts the ruling party would secure a simple majority, ensuring continuity without giving the government enough seats to hand greater power to President Tayyip Erdogan.
But those expectations - and the lira - have unravelled with polls in recent weeks that showed the AKP may have to form a coalition government.
Deputy Prime Minister Ali Babacan conceded on Tuesday a coalition could be on the cards.
"A single-party government is the strongest probability but one shouldn't ignore the other possibilities," he said in an interview with broadcaster Bloomberg HT.
A coalition is seen as a negative for markets as it could lead to policy uncertainty.
The lira was at 2.6895 to the U.S. dollar at 0938 GMT, after hitting its weakest since May 12, and sliding for the ninth straight day. The currency is down around 15 percent this year, according to Thomson Reuters data.
Only the Ukraine hryvnia and the Brazilian real have performed worse.
Overall, the Istanbul stock market was firmer, up 0.23 percent.
However, shares of Dogan group publishers Dogan Gazetecilik and Hurriyet Gazetecilik both tumbled after the capital markets board said it had rejected their application for a merger.
Comments
Comments are closed for this article.