The Turkish Lira Gained Against The Dollar

turk-lirası-banknot-dovizxThe Turkish lira gained 1.7% against the dollar at 6.20AM Eastern time and the Turkey ISE National 100 Index rallied 1.6%. The iShares MSCI Turkey ETF (TUR) gained 10.2% this month.

Financial markets like political stability, but few expect political turmoil in Turkey to end anytime soon.  Turkey’s Prime Minister Erdogan vowed to crack down on the Gulenists and is expected to run for the presidential election this August.

In comments widely interpreted as signaling a postelection crackdown against his enemies, the premier warned the movement of U.S.-based Islamic cleric Fethullah Gulen, a former ally turned political rival.

“Tomorrow there may be those who have to flee. But we will go into their caves. They will pay the price,” Mr. Erdogan said.

Mr. Erdogan is likely to interpret the result as a popular seal of approval for his recent policies, which his opponents decry as authoritarian, analysts said. The tally could also encourage the premier to run to become Turkey’s first directly elected president this summer, a move that could allow him to govern for another decade.