Mubasher: The Turkish lira (TRY) on Monday continued its dive against the dollar, after President Recep Tayyip Erdogan continued to push for a recount of local elections in Istanbul, Reuters reported.

By 3:08 pm GMT, the lira fell 1.46% to 5.7084, having traded earlier at TRY 5.7120 more than 1.5% down from Friday’s close of TRY 5.6220

President Erdogan’s Justice and Development Party (AKP) demanded a recount in Istanbul and Ankara, citing irregularities.

Erdogan cast doubt on the results, pointing to “some theft at the ballot box.”

The margin between the two Istanbul candidates was very small for the opposition to claim victory, Erdogan said.

"No one has the right to declare themselves victorious with a difference of around 13,000-14,000 votes," the president said of the Istanbul results.

The Turkish currency has been pulled down by initial results that Erdogan’s AKP almost lost grip of both Ankara and Istanbul to main opposition party CHP.

Moreover, the lira decline came also on the back of the potential for a diplomatic feud with the US over Israel, Rabobank emerging market foreign exchange strategist was quoted by Reuters.

Erdogan said that the West Bank belongs to Palestinians, after Israeli Prime Minister Benjamin Netanyahu pledged that he would annex settlements in the region if he wins Tuesday’s votes.

“Contagion from Turkey could spill into other [emerging market] countries if the lira selloff escalates markedly in the coming weeks,” Matys said, noting that a new economic plan to be announced by the country’s Finance Minister Berat Albayrak could help restore the currency regain confidence.