The lira is surging after Turkey's referendum

pulse

April 17, 2017 5:21 PM

The Turkish lira surged after the referendum vote on Sunday.

Supporters of Turkish President Tayyip Erdogan celebrate in Istanbul.

The Turkish lira surged after a slim majority voted in favor of amendments to the constitution, which grant President Recep Tayyip Erdogan "sweeping powers in the biggest overhaul of modern Turkish politics."

The lira's appreciation may seem unexpected to some onlookers, given that investors usually have concerns over what consolidation of political power and disintegration of checks and balances could mean for a country's economic and political agendas.

"Some suggest that this lifted the uncertainty that had been weighing on sentiment," Marc Chandler, global head of currency strategy at Brown Brother Harriman, wrote on Monday.

Nevertheless, it's noteworthy that the "yes" vote won with a slim majority, leading some to argue it's possible that the certainty favored by markets could be short-lived.

Results from state-run Anadolu news agency show that "yes" had about 51.3% compared to 48.7% for "no" with nearly 99% of the vote counted, according to The Guardian, and that "the results have done little to relieve the tensions in divided Turkey," CNN says. Also notably, the three largest cities in Turkey — Istanbul, Ankara, and Izmir — voted against the referendum.

"[T]he ," Neil Sheering, Chief EM Economist at Capital Economics, wrote on Sunday.

"[S]tepping ."

In particular, Shearing outlines three things worth keeping an eye on:

pulse