Mubasher: Turkish lira (TRY) on Monday declined against the US dollar on Monday, almost at its  lowest level in seven months, as the prospect of a re-run of Istanbul elections and Trump’s latest tariff salvo unnerved investors, according to Ahval.

The lira dropped earlier in the day as much as 0.8% to TRY 6.003 per dollar in thin trade, passing briefly through the psychologically important level.

By 12:23 pm GMT, the USD/TRY pair rose 0.82% to TRY 6.0134.

Turkey’s election board could decide on a request by Turkish President Recep Tayyip Erdogan’s governing Justice and Development Party (AKP) to re-run the election for Istanbul mayor, held on 31 March and won by opposition candidate, according to Ahval. The board will meet to look into allegations of fraud and other irregularities.

This could drag the lira further down as a re-run of elections could delay much-needed economic reforms and underpin populist policies, analysts told the news outlet.

Moreover, the drop in the Turkish currency was further fanned by a surprise announcement by US President Donald Trump that the US tariffs on Chinese goods will be raised.

Adding to that, the tension in the US-Turkish ties could be further exacerbated and thus the currency crisis with the prospect of more US sanctions against Ankara raised by Turkey’s refusal to scrap plans to purchase S-400 defence missiles from Russia.