The Turkish lira slid again on Wednesday – by as much as 2% – as markets await a US Federal Reserve decision to raise interest rates. With the sharp drop, the country’s currency is once again down around 20%, year on year.
Turkey’s economic predicament, for which there are no quick fixes as we wrote yesterday, comes as President Recep Tayyip Erdogan faces an election of his own making. In April, Erdogan moved up a national vote by more than a year to June 24, while he was riding a wave of popular support for a successful military campaign in northern Syria.
More is on the line than just the president’s short-term political future. A win for Erdogan would cement constitutional changes giving the country’s executive branch sweeping new authority.
Oh what a difference two months make. Now, as the country looks at an increasingly grim economic picture, at least one poll shows there is a chance, however slim, that Erdogan might lose.
A poll conducted by Foresight Danismanlik, commissioned by Bloomberg, found that support for Erdogan was slightly above the 50% needed to win the first round of voting. But that was within the relatively high 3.5% margin of error. The poll tracked other surveys which found the race getting closer.
Erdogan remains the country’s most popular politician, but newly formed political alliances have turned the election into a second referendum on the constitutional changes, and a loss for Erdogan in the first round of voting would be hugely embarrassing. A close win would signal his waning support. If Erdogan does eke out a victory, he will face the prospect of further economic deterioration, which in turn could further galvanize political opposition.