Turkish Lira and stock market has collapsed to unprecedented levels after a political maelstrom generated by the unforeseen detention of Istanbul’s mayor, Ekrem Imamoglu.
As Imamoglu, a notable adversary of President Recep Tayyip Erdogan from the opposition Republican People’s Party (CHP), faced detainment, the financial repercussions were swift and severe.
The beleaguered lira sank immediately from 36.68 on Tuesday to nearly 41 per dollar before modestly recuperating to 38.75 in Istanbul’s early afternoon trades, a 5.8% depreciation against the greenback as per LSEG. Parallelly, the BIST 100 stock index was rattled, sinking as low as 7% earlier in the day. Now it is trading 6% below its previous day.
The charges, publicly disputed by Imamoglu, include allegations of terrorism and orchestrating organized crime, publicized by Anadolu, a state-controlled news service. These accusations unfold amid looming elections in Turkey, with Imamoglu positioned as a potential presidential candidate for the CHP, amplifying domestic political tensions.
This turbulence raises significant uncertainties as the CHP prepares for its March presidential primary, for which Imamoglu was a likely frontrunner, underscoring the country’s political volatility and its market impacts.
