In response to the return to power of President's Recep Tayyip Erdogan
Ankara - AFP
The Turkish lira and stocks soared on Monday after President's Recep Tayyip Erdogan's Justice and Development Party (AKP) was returned to power in a stunning weekend election victory.
The lira was up 4.4 percent at 2.78 to the US dollar in early trade, around its highest level in seven years, after tumbling over 25 percent this year on Turkey's economic woes and political turmoil.
The main index on the Istanbul stock exchange, the BIST, was up 5.4 percent at 83,735 points shortly after the opening.
Sunday's election saw the AKP win back its overall majority in the Turkish parliament, paving the way for one-party rule once again after months of instability following an inconclusive vote in June.
The AKP won almost half the vote, giving it around 315 seats in parliament, and is now set to rule Turkey until 2019.
"The Turkish lira could now see one of its strongest periods, moving closer to two per dollar down from three," wrote FXstreet analyst Valeria Bednarik in a note published by the Anatolia news agency.
"This election will end Turkey's period of transition, and should lead to a marked strengthening of the country's economy."
Turkey's economic growth slid to less than three percent last year after levels around 10 percent five years ago, and the lira had tumbled around 25 percent since the start of 2015.
"This (election) outcome eliminates concerns regarding (the) formation of the government or repeat elections that might have arisen had elections produced a similar outcome to June vote... but gives rise to some other uncomfortable questions," said Inan Demir, chief economist at Finansbank.
He said even though markets were expected to gain on the removal of immediate uncertainty, question marks remained over the fate of the Kurdish peace process, future economic policies and whether the AKP would press on with its clampdown on its domestic rivals and critical media.