After Erdogan's election victory: Investors in Turkey are hoping for better economic policy

After Erdogan's election victory: Investors in Turkey are hoping for better economic policy

According to a report by www.rnd.de, investors in Turkey have welcomed Recep Tayyip Erdogan's victory in the runoff election as it brings certainty about the future government. The leading index BIST 30 rose by 4.4 percent, reaching 5269.87 points, the highest level since the days before the first round of elections. However, the Turkish national currency, the lira, lost value.

However, the election outcome raises the question of whether Erdogan will take measures to curb inflation. Despite a massive increase in inflation, he has so far only responded with moderate interest rate increases. This led to a significant loss in the value of the lira in the foreign exchange market.

Erdogan's unorthodox economic policy, which maintains a low interest rate policy despite an inflation rate of over 40 percent, is criticized by financial market experts. This approach is not considered effective in dealing with the high inflation rates, which leads to a large loss of purchasing power of the population.

However, the calming of the markets after the election result could be short-lived if more conventional economic and monetary policies are not implemented. The lira is nearing a record low, increasing the risk of a default.

The uncertainty about Turkey's further economic development and ongoing inflation could have long-term effects on the market and the financial sector. It is therefore important to closely monitor developments in Turkey and adequately analyze the potential risks.