The Turkish Lira reached new record lows against the Dollar on Monday, whilst stocks increased, as President Tayyip Erdogan won Sunday's presidential election, extending his rule into a third decade.

The Lira edged down to 20.065 to the Dollar in early European trade on Monday, surpassing Friday's previous record low.

Turkey's currency has fallen around 7% since the beginning of the year, losing more than 90% of its value over the last decade, Reuters news agency reports.

Since the currency crisis in 2021, authorities in Turkey have adopted a more hands-on role in forex markets, with daily moves becoming marginal, whilst gold and FX reserves have weakened.

"Erdogan's victory has seen further pressure on the Turkish Lira," stated Rabobank senior macro strategist Benjamin Picton.

Despite several years of economic turmoil, which was down to unorthodox economic policies, say, critics, Erdogan was victorious in Sunday's election.

Furthermore, stocks gained, with the benchmark BIST-100 index up 3.5% and the banking index rising over 1%. The number of foreign asset managers holding Turkish stocks has declined over the past few years, and the market is predominantly fuelled by local investors.

"An Erdogan win offers no comfort for any foreign investor," according to Hasnain Malik, head of equity research at Tellimer.

"Only the most optimistic would hope that Erdogan now feels sufficiently secure politically to revert to orthodox economic policy."

The strong showing for Erdogan in the first round of the election in mid-May led to a selloff in Turkey's international bonds, the Reuters report adds.

Turkey's Dollar bonds fell to a six-month low last week, whilst the cost of insuring exposure to the country's debt via credit default swaps increased to a seven-month high.

Turkey's international bonds held steady on Monday, whilst credit default swaps were near the closing level from Friday.