The Turkish lira has sunk to a new low: 2.75 lira to the dollar. This drop was facilitated by the results from the Turkish parliamentary election on Sunday in which the AK Party failed to win a majority for the first time in 13 years.
The party is now forced to enter into a coalition in order to form a government. Furthermore, the current situation doesn’t give any reason to believe that a coalition between the parties will be formed since there are real disagreements. In this case there is a risk of a dissolution of parliament and early elections.
Despite the efforts of the Turkish central bank, the lira has been steadily losing ground under the pressure of the strengthening dollar. The Turkish lira is likely to lose even more of its value until the political situation is resolved.