What happens next?

June elections yielded expected as well as unexpected results.

Total number of votes won by MHP turned out to be surprising for everyone. Another important feature of this election with a record breaking turnover was that İYİ Party has won some of the CHP votes too, which is the main opposition party. On the other hand, HDP surpassed the 10 per cent threshold required to enter the parliament has been another important outcome.

Muharrem Ince’s performance deserved respect and appreciation. I definitely expect significant changes in CHP administration. The fact that Erdoğan re-elected President should be considered one of the most remarkable victories in Turkish as well as world political history.

“Let me remind you of what I said…”

Now, what do we think will happen next? As you may remember, I shared a couple of scenarios with you on June 18. Let’s take a look back at the first scenario:

“In the first scenario, President Erdoğan wins the elections in the first round and the People’s Alliance (Cumhur İttifakı) achieves a parliamentary majority. In such case, it will be a nervous wait for foreign investors. But things are expected to improve after a while, especially with more moderate statements from Ankara including the lifting of Turkey’s State of Emergency. After all, a presidential administration coming to power with the majority of people’s votes is legitimate and everyone will have to respect this legitimacy sooner or later. USD/TRY may be expected to stand at a band of 4.20-4.50. As for the interest rates, they may be expected to go downward in the medium-term. However, statements that are disruptive to the economy may bring irreparable damage to markets. If this happens, then we should be ready to face circumstances even harsher than those previously experienced…”

This goes to show that the Administration will have to adopt a more moderate, balanced and reliable foreign policy from now on, while avoiding statements that may create concerns among the Monetary and Capital Market Actors. Everything should be done and carried out according to international standards. A trend towards liberalization should prevail.

By the way, a high level of consensus in the parliament will be required for a Constitutional amendment.

That’s all from me today… I am leaving you now with intriguing comments you will hear through the course of the day.