The Turkish lira plunged against the US dollar to an eight-month low, after the country’s board of election announced a repeat of the local election for the city of Istanbul, a move that may have raised concerns among investors about an erosion in Turkey’s democracy. The lira’s six-month return against the US dollar turned negative last week, with the Turkish currency being positioned at the bottom of its six-month return range against the greenback as of last Thursday. Despite the Turkish central bank’s unconventional efforts to prop the lira, the Turkish currency recorded a 5% loss against the US dollar over the past six months. Only six weeks ago, the lira was the best performing emerging currency, with a six-month return above 20%. The Turkish lira was still the riskiest emerging currency last Thursday, its volatility exceeding 20%. However, the Turkish lira remained at the low-end of its volatility range against the US dollar.
See graph from the Equity Risk Monitors as of 9 May 2019: