Turkey’s lira hit fresh record lows against the dollar on Monday, though stocks rallied, after President Tayyip Erdogan secured victory in Sunday’s presidential election, extending his increasingly authoritarian rule into a third decade.

The lira weakened to 20.077 to the dollar, breaking through the previous record low touched on Friday.

The lira has slumped more than 7 per cent since the start of the year, and lost more than 90 per cent of its value over the past decade, with the economy in the grip of boom-and-bust cycles and rampant bouts of inflation.

Since a 2021 currency crisis, Turkish authorities have taken an increasingly hands-on role in foreign exchange markets with daily moves becoming unnaturally small while FX and gold reserves have dwindled.

“In our view, Erdogan’s biggest challenge is Turkey’s economy,” said Roger Mark, analyst with Ninety One. “His victory comes against a backdrop of perilous economic imbalances, with his heterodox economic model proving increasingly unsustainable.”

Erdogan prevailed despite years of economic turmoil which critics blame on unorthodox economic policies which the opposition had pledged to reverse.

Meanwhile, stocks enjoyed gains with the benchmark BIST-100 index up nearly 5 per cent and banking index rising by 4 per cent. The share of foreign asset managers holding Turkish stocks has dwindled in recent years and the market is chiefly driven by local investors.