Erdogan Overcomes Inflation Woes to Extend Record Rule in Turkey

(Bloomberg) -- Turkish President Recep Tayyip Erdogan sealed an election victory, raising the prospect of more friction with Western governments and foreign investors.

The country’s longest-serving leader prevailed 52.2% to 47.8% in a runoff vote on Sunday against Kemal Kilicdaroglu to take his 20-year rule well into a third decade, based on results with almost all ballots counted.

The lira sank to new low, weakening beyond 20 per dollar, as traders reined in bets that Turkey would soon end some of its unconventional economic policies, which include keeping interest rates well below the level of inflation.

Investors’ attention will now turn to who Erdogan picks in his new cabinet, expected to be announced as soon as Friday, according to two Turkish officials familiar with the matter. That may signal whether the president is likely to change tack by reducing heavy state intervention in markets.

Late on Sunday, Erdogan, speaking in Ankara, cited inflationary pressures on the economy and said he would put together a new team with “international credibility” to manage the nation’s finances.