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The decision by Turkish authorities to wipe away a stinging defeat for President Recep Tayyip Erdogan and rerun the election for mayor of Istanbul left the opposition angered but determined on Tuesday to win the race a second time.

Ekrem Imamoglu, the opposition candidate who narrowly won the March 31 election, only to have that victory annulled on Monday, announced on Tuesday that he would run again, and rallied his supporters by retweeting a message from his partys Twitter account that said, We will win again.

The move by Mr. Erdogan to overturn the election results quickly reverberated through Turkey and beyond. Sporadic protests broke out Monday evening after the announcement, and the lira, a barometer of the way foreign investors regard the country, declined sharply on Tuesday down 5 percent from earlier in the week.

The decision by the High Electoral Council, which cited irregularities in how officials were chosen to oversee voting at some polling stations, left the opposition with the difficult decision of whether to take part in a new election that it considers illegitimate.

Boycotting the vote would have handed control of the countrys financial capital and largest city back to the president and his party. Instead, Mr. Imamoglu and the opposition made the choice to compete in a new election, scheduled for June 23, even as they denounced it an affront to democratic principles.

Our democracy has been struck a great blow, Mr. Imamoglu told reporters on Tuesday in Ankara. We should all fix this process together.

Early Tuesday, several minor candidates announced that they would withdraw from the race, in an apparent effort to forge a united front and throw their support behind Mr. Imamoglu. That could tip the balance in a race that was decided the first time by a razor-thin margin, less than 0.2 percent of the vote.

Mr. Imamoglus win over Binali Yildrim, the candidate of the governing Justice and Development Party, or A.K.P., was an embarrassing blow to Mr. Erdogan in his home city.

Mr. Erdogan was voted in for another five-year term as president last year, with sweeping new powers, strengthened by recent changes to the constitution. But political analysts say the opposition wins in several cities in March, including Istanbul and the capital, Ankara, infuriated Mr. Erdogan. The president and the A.K.P. alleged irregularities and petitioned for a new vote.

After an initial recount of some contested districts in the city, election officials certified Mr. Imamoglu as the winner, and he entered office in April.

But in a stunning reversal, the High Election Council ruled, 7 to 4, on Monday in favor of the governing party and called a new vote. The move drew criticism in the country and abroad as the latest example of Mr. Erdogans authoritarian overreach and a blow to Turkeys democratic foundation. The governor of Istanbul will act as interim mayor until the election.

Mr. Erdogan addressed lawmakers in Parliament on Tuesday, saying the nation could not ignore unlawfulness in the election.

I believe the people of Istanbul will make the right decision on June 23, he said. We consider this decision that cleaned up the shadow over the Istanbul elections as a step to strengthen our democracy.

On Tuesday, lawmakers from the Republican Peoples Party, the opposition party of Mr. Imamoglu, gathered in Ankara to plot a way forward.

Everything is going to be very fine, the partys leader, Kemal Kilicdaroglu, told reporters outside the party headquarters, according to the Turkish newspaper Cumhuriyet. Despite everything we will bring democracy to this country.

In a televised speech Monday night, Faik Oztrak, a party spokesman, had used similar language as he denounced the decision to rerun the election as an attack on legitimate democracy.

Considering the narrow margin between Mr. Imamoglu and Mr. Yildirim, the withdrawal of the other opposition candidates, who took a combined 2.6 percent of the vote, could make a difference.

The Turkish Communist Party withdrew its candidate, and the Communist Movement and Labour Movement Party, two groups whose candidates ran as independents, announced that they would also withdraw.

One of the biggest points of criticism of the councils decision to invalidate the results was that it applied only to the result of Istanbuls mayoral election, not the many lower offices that were contested at the same time.

Meral Aksener, the head of a nationalist party that supported Mr. Imamoglu, raised that question when addressing lawmakers in Parliament Tuesday.

In those envelopes there were four ballots. Four ballots under the jurisdiction of the same ballot box officials, she said. Choosing only the metropolitan municipality votes and canceling those ones how can you explain it?

Some analysts said Mr. Erdogans decision to dispute the election could damage him in the long term and was likely to increase support for the opposition.

Ozgur Unluhisarcikli, the director of the German Marshall Fund in Ankara, a policy institute, said that Mr. Erdogan was not merely gambling, but playing Russian roulette.

The stakes are very high. The odds are against him, Mr. Unluhisarcikli said. This is a question about whether Erdogan is willing to pay a long-term political price to take Istanbul.

The political turmoil has worsened an already precarious economic situation in Turkey. Inflation is at almost 20 percent, eroding living standards at the same time that growth has stalled.

Mr. Erdogans successful bid to nullify the Istanbul election results is certain to further undercut the confidence of the foreign investors whose money has fueled Turkish growth, but who have become increasingly disenchanted with his management of the economy.

Every decline in the lira amplifies the countrys problems and heightens the danger of a vicious circle of rising prices and sagging growth. When the lira loses value, imported goods become more expensive, feeding inflation. Turkish companies that have borrowed money in dollars, a common practice, have more trouble repaying their loans as the lira they earn in sales decline in value.

Bankruptcies in Turkey are already on the rise, straining Turkish banks. Business people complain that government agencies and courts are tilted in favor of Erdogan cronies.

Yet, with another election pending, Mr. Erdogan is unlikely to impose the austerity measures and other reforms that economists say are needed to tame inflation and prevent a credit bubble from bursting.

Opposition protesters had rallied on the streets of Istanbul on Monday night after hearing the news of the new election, but by Tuesday, the streets were quiet.

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In Istanbul Election Do-Over, Erdogans Opponents Unify