As of 04:13 GMT, the lira had registered 19.9845 against the dollar, far from a record low of 19.9950 at the start of the session.
The Turkish lira came under pressure after the Turkish Central Bank decided on Thursday to keep interest rates unchanged at 8.5%, in line with expectations.
Turkey’s Central Bank said in a statement that the underlying inflation trend continues to improve.
“Maintaining favorable financial conditions is now even more important in order to maintain continued industrial production growth and a positive employment trend,” the bank said after its monthly policy meeting.
Turkish dollar-denominated equities and sovereign bonds have fallen, while the cost of insuring exposure to Turkish debt has risen since the first round of presidential elections on May 14.
Erdoğan had a significant lead over his main rival, Kemal Kılıçdaroğlu, in the first round, but could not win more than 50% of the votes he needed to avoid a second round.
Nicholas Farr, emerging markets economist at Capital Economics, said Erdogan’s expected victory had reduced the prospect of a “much-needed” rate hike.
“The Turkish economy urgently needs much higher interest rates and a deviation from the current policy framework to address major macroeconomic imbalances,” he added in a note.
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