The 2023 Turkish Elections:Opportunities for Trading on the USD/TRY

The 2023 Turkish elections have been closely watched worldwide due to their potential impact on the Turkish Lira and global financial markets. The elections, held on May 14, 2023, have seen Turkish citizens voting for a new president and parliament, marking a significant turning point for Turkey’s economy and politics​​.

Economic Background

The incumbent President Erdogan and the AK Party have been in power for the past twenty years, facing strong resistance from Kemal Kilicdaroglu and a unified opposition party. The opposition has promised to restore the Central Bank’s independence, reverse unorthodox economic policies, and improve ties with the US. During Erdogan’s tenure, the Turkish economy has suffered from a weak Lira and low GDP, with the USDTRY price rising from about $4 in 2018 to about $18 in 2021. The Turkish Lira has declined dramatically against the US dollar in the past five years, with the forward markets expecting further weakness​.

As of the election period, USD/TRY was trading at a record high of $19.81, with Turkey facing an inflation rate of close to 43.68% after breaching a 24-year high last October​. Due to high CPI, low-interest rates of 8.5%, and both a current account deficit and a budget deficit, the Turkish central bank has taken macro-prudential steps to control the FX​.

Potential Market Impact

Foreign buyers have limited access to Turkish stocks as they make up only 0.6% of broad emerging market stocks. Foreign-listed stocks have limited local influence, making it hard to buy Turkish companies. The Spanish banking giant BBVA, which owns 49% of Garanti, the third biggest bank in Turkey, is a noteworthy exception. More than 10% of Turkey’s GDP comes from the tourism business, making companies like Hilton and Wizz Air indirectly influenced by the Turkish economy. Neighboring Greece may also experience some effects, especially for companies like Star Bulk and TOP Ships​.

The elections are both a potential risk and opportunity for traders and investors. The Turkish Lira and Turkish stocks may become more volatile, which could lead to profitable trading opportunities for those who are well-positioned and understand the risks. However, the uncertainty surrounding the election results and the potential for policy changes make these markets potentially riskier​.

Election Outcomes and Market Reactions

The current state of the Turkish presidential election is President of Turkey Recep Tayyip Erdogan received 49.24% of the votes in the first round of the presidential elections, while his opponent Kemal Kilicdaroglu from the opposition coalition of seven parties garnered 45.07%, according to the final results published by the Supreme Election Board.

 According to the results published in the official gazette Resmi Gazete, Erdogan received 26,086,102 votes, while Kilicdaroglu received 23,873,749 votes. Sinan Ogan, the candidate from the ATA coalition, was supported by 2,796,613 voters (5.28%), and Muharrem Ince received 0.41% of the votes.

The financial world is waiting for the election results to decide whether Turkey becomes a “buy” again. Traders have braced for more volatility in the lira as the first round shows no clear winner and indicates a runoff election. The currency was slightly weaker in thin trading last Friday as Turkey’s state banks intervened to hold the exchange rate at around 19.75 per dollar. Money managers have said that if these results hold, it would be one of the worst outcomes for markets, given the uncertainty for the next two weeks​​.

Technical Analysis

*Daily chart

The key support levels are at 19.62, 19.25, 18.94, and 18.63. The price is significantly above the upper boundary of the Bollinger Bands, while the RSI has been in the oversold zone for a long time. Most likely, the pair will start declining after May 28th (the second round) and by the first decade of June 2023, it will be trading around 18.6.

This assumption is based on the opinion of analysts that the winning candidate will take all possible measures to stabilize the situation in the country’s currency market.


The 2023 Turkish elections represent a significant juncture for the nation’s economy and currency. The results could lead to changes in economic policy, affecting the value and volatility of the Turkish Lira and stocks. While this situation presents potential opportunities for traders, it also introduces additional risks and uncertainties. As such, traders and investors need to stay informed and prepare for various potential outcomes in the Turkish markets​.