People cheer as President of Turkey and the leader of Turkey's ruling Justice and Development (AK) Party Recep Tayyip Erdogan addresses the crowd during a campaign rally ahead of March 31 local elections, at Cubuk district of Ankara, Turkey on March 28, 2019. Metin Aktas | Anadolu Agency | Getty Images

Turkey's voters head to the polls on Sunday amid new, widespread worries about their currency, and with much at stake for investors in the country. Investor fears have roiled Turkey's lira over the past 48 hours, sending shockwaves through the country of 80 million just days before nationwide local elections. Markets still remember Turkey's currency crash last summer, which triggered a sell-off in emerging markets and sent investors running for the hills.

If the AKP loses to an opposition party challenger, it will be a symbolic indication that the ruling party is struggling to maintain its appeal with the urban elite. Emily Hawthorne Middle East and North Africa analyst, Stratfor

Results for President Recep Tayyip Erdogan's ruling Justice and Development Party (AKP) could determine the fate of monetary policy and the stability of markets in Turkey and beyond. The lira dropped as much as 5 percent against the dollar Thursday on news that the Turkish Central Bank had burned through nearly a third of its foreign reserves in the first three weeks of March as it tried to prop up the currency and stifle short-sellers ahead of the vote. This week, Turkey's overnight swap rate skyrocketed to 1,200 percent as it tried to keep the lira from falling.

A matter of 'political capital'

There would "absolutely" be a sell-off in Turkish markets "if AKP loses Istanbul or Ankara," the country's two biggest cities, said Timothy Ash, senior emerging markets strategist at Bluebay Asset Management. "The assumption has been that after elections, Erdogan normalizes policy. But if he loses elections, he will lose political capital to do that." Voters have a major concern at the top of their list: the economy. Unemployment in Turkey is now around 13 percent, nearly a decade high, and inflation sat at 19.7 in February — though that's the first time it's dropped below 20 percent since August. Consumers' purchasing power has fallen. The pain is particularly acute for the many Turkish businesses that owe debts denominated in foreign currencies. The government has opened food stalls selling fruit and vegetables at below-market rates to help ease the inflation pain.

New tactics by opposition parties

Erdogan enjoyed re-election to another five-year term in a power-consolidating victory last summer, but his ruling right-wing AKP faces new challenges in big cities as opposition parties blame him for the economy. Local elections will see up to 57 million registered voters cast ballots for mayors and municipal leaders in 81 provinces. They are seen as a referendum on Erdogan himself.