ISTANBUL - Turkey expects Donald Trump's White House will lower tariffs on its steel and textile exports, the trade minister said on Thursday, as the lira and Turkish assets continued to rally on prospects of new U.S. economic policies.

"We expect that...customs duties will be reduced in our foreign trade, especially in steel and textile products," Trade Minister Omer Bolat said in an interview with broadcaster AHaber.

Trump's sweeping U.S. presidential victory on Wednesday helped spark a rally of as much as 0.4% in Turkey's lira TRYTOM=D3, to 34.2 to the dollar, its strongest level since mid-October.

Istanbul's benchmark stock index jumped nearly 3%, marking its best day since May on Wednesday.

Investors and bankers said Trump's stated policies of pushing for peace in Gaza and Ukraine would likely help along Ankara's economic turnaround programme, which relies in part on foreign inflows to reverse years of soaring inflation.

Trump's promised trade and immigration policies could also likely leave Turkey relatively unscathed among large emerging market economies such as Brazil, Mexico and China, they said.

Bolat said he expected Trump's second term as president would benefit Turkey's defence industry needs, despite past U.S. sanctions that were leveled under Trump's first term.

He also said he expects fallout on banks to ease from Washington's current Russia-related embargoes.

(Reporting by Ezgi Erkoyun in Istanbul and Nevzat Devranoglu in Ankara; Writing by Jonathan Spicer; Editing by Daren Butler)