Turkish Lira Rises Versus Dollar as Court Rejects Political Ban

By Yon Pulkrabek

July 31 (Bloomberg) -- Turkey's lira rose for a fourth day against the dollar after the court rejected a case to ban Prime Minister Recep Tayyip Erdogan's Justice and Development Party yesterday.

The lira climbed as much as 1.9 percent to 1.1612 per dollar, its highest level since Jan. 15, and was at 1.1636 by 9:08 a.m. in Istanbul, from 1.1835 late yesterday.

``Overall, this a very positive result for Turkey,'' analysts led by Nick Chamie at RBC Capital Markets wrote in a client note. ``It reduces political uncertainty and it keeps the pro-reform AKP party in power.''

Under Erdogan, Turkey has posted 23 consecutive quarters of economic expansion and attracted a record $40 billion in foreign direct investment in the past two years.

The Constitutional Court ruled to reduce state funding for the party as a punishment for violating a constitutional ban on basing government policies on religious edicts.

To contact the reporter on this story: Yon Pulkrabek at ypulkrabek@bloomberg.net