The Istanbul stock exchange’s BIST-100 benchmark index fell by 1.76% d/d to 108,745 at closing prices on April 17 after Devlet Bahceli, leader of nationalist party MHP and Turkish President Recep Tayyip Erdogan’s junior ally since the failed coup attempt in July 2016, called for early parliamentary and presidential elections at his party’s group meeting in the parliament.

The Turkish lira (TRY) weakened against the dollar from 4.0850 to 4.1272 initially, but then recovered to below the 4.10 level. At around 09:00 Istanbul time on April 18 it was trading at 4.0952.

Government bonds also seemed unaffected by the early polls call, which the ruling AKP has agreed to consider. The yield on Turkey’s 10-year benchmark bonds, which moved as high as 13.56% last week, declined from 13.17% at closing prices on April 16 to 13.14% on April 17.

The 2-year benchmark bond yield remained unchanged at 14.39% by the close of trade.

Erdogan told reporters he would meet with Bahceli on the afternoon of April 18 and they would discuss the issue of bringing the elections forward from November 2019 to August this year. An announcement is expected after the meeting.

Economy Minister Nihat Zeybekci said Bahceli’s call for early elections made for “a positive step for predictability and sustainability” of Turkish economy.

Following the elections, Turkey will switch to an executive presidency under which the head of state will have sweeping powers, while the post of prime minister will be abolished and parliament will play a much-diminished role.