Turkish financial markets tumbled on Tuesday after the elections board ruled to scrap and re-run Istanbul elections, with the lira down 1.3 percent to its weakest level since last year's currency crisis was waning in October. The Turkish lira stood at 6.1600 against the dollar at 1011 GMT, from 6.0829 on Monday, having earlier hit its weakest level since Oct. 5. As investors questioned Turkey's commitment to both the rule of law and economic reforms during a recession, bonds and stocks were also sold off. The main BIST100 share index was down 1.93 percent at 1009 GMT to its lowest in a month, while the main Turkish bank stock index fell 2.77 percent after earlier touching its lowest level since January. Fitch last week reaffirmed Turkey's sovereign rating at 'BB' with a negative outlook, but Parker said it could be downgraded if "existing weaknesses are aggravated, especially given the volatility in the Turkish economy and currency." Some investors worried that Turkey's central bank would resort to "back door" measures to stabilize the lira, as it did before the initial election in late March, when it ramped up its use of swaps to fend off a volatile selloff. In Berlin, German Foreign Minister Heiko Maas criticized plans to re-run Istanbul's mayoral election as "not transparent and incomprehensible to us". The re-run on June 23 was ordered by Turkey's election authorities after President Recep Tayyip Erdogan's ruling party complained that the narrow victory of opposition candidate Ekrem Imamoglu was marred by irregularities. "Who holds the office of Istanbul's mayor can only be decided by the will of the Turkish voters," Maas said in a statement. "Maintaining democratic principles with transparent electoral conditions is our top priority." The main opposition Republican People's Party (CHP) has condemned the re-run decision by Turkey's top election body as "neither democratic nor legitimate". — Agencies
