Lira takes hit as ruling AKP loses majority, central bank moves in with easing

Lira embraced volatility as expected over Sunday's election, but what was not expected was that ruling AKP would lose its majority, pushing the country towards political uncertainty and turmoil.

Turkish Lira (TRY) moved to new record low against dollar. At one point the currency was trading 2.808 against dollar, however recovered from there over profit booking. Lira is still down more than 4% against dollar today. Lira is currently trading at 2.765, consolidating over its single largest loss in at least 7 years.

Turkish president's party AKP was expected to win the election according to all political analysts and polls, only question was what will be the margin. President Erdogan was planning to extend his powers with change in constitution, however that is out of the question as of now.

• Turkish Central bank has moved in swiftly after the election result to prevent currency from blow up cut rates on Foreign exchange borrowings. Effective from June 9, banks can borrow dollars from Central bank at 3.5%, down from 4% and Euro at 1.5% rather than 2%.

Lira is stabilizing as Central bank moves in, however further rise might be in store in near future as political uncertainty over minority government might call for early election.

AK party for the first time failed to gain majority in thirteen years while pro-Kurdish party or HDP gained about 11% and will be entering parliament for first time.

Turkish benchmark stock index ISE 100 is down 5.5% today.

Expect Lira to lose further against dollar. It is already down about 20% this year so far.