Istanbul’s mayor, Ekrem İmamoğlu, delivers a speech. The lira plunged after his arrest.
The Turkish lira weakened sharply to a record low against the U.S. dollar and the Istanbul stock market dived after the main opposition challenger to President Recep Tayyip Erdoğan was arrested.
Investors sold Turkish assets as fears grew that Erdoğan’s increasingly authoritarian stance and detention of his biggest rival will destabilize the country, a North Atlantic Treaty Organization member.
The Turkish lira
USDTRY
+0.06% at one point was down 14.5% to a record low of more than 42 versus the greenback, though later it was trading down 6.2% at 38.95.
Timothy Ash, a strategist at BlueBay Asset Management, called it a “killer blow” to the Turkish central bank’s fight against inflation as the lower lira raises import prices.
Inflation in February was 39%, which nonetheless is substantially down from the 75% inflation rate in May, according to government statistics.
The BIST 100 equity index
XU100
+0.49% in Istanbul fell 5.9%, though it remains up 3.6% for the year to date. The U.S.-listed iShares MSCI Turkey ETF
TUR
+0.21% was down 10% in premarket action.
Ekrem İmamoğlu, mayor of Istanbul since 2019, was expected on Sunday to be nominated as the Republican People’s party presidential candidate for elections due by 2028. Opinion polls show him ahead of Erdoğan if a poll were held for Turkey’s top office.
But on Wednesday the state-run Anadolu news agency said that İmamoğlu had been detained as part of an investigation into alleged links to terrorism related to support he may have received from a pro-Kurdish political group in his re-election as mayor of Turkey’s largest, but not capital, city in 2024.
Turkish LiraSource: Tullett Prebon
2021'2501020304050
In a voice message shared by his office, İmamoğlu said: “Hundreds of police are at my door. … This immoral and tyrannical approach will undoubtedly be overturned by the will and resilience of our people.”
The arrest of İmamoğlu also raises concerns about the broader reform agenda in Turkey, according to William Jackson, chief emerging-markets economist at Capital Economics.
“In part, that’s because it points to a weakening of institutions and the rule of law in the country. But it’s also because it suggests that political rather than economic concerns may be starting to dominate President Erdoğan’s thinking,” Jackson said.
The Turkish lira weakened sharply to a record low against the U.S. dollar and the Istanbul stock market dived after the main opposition challenger to President Recep Tayyip Erdoğan was arrested.
Investors sold Turkish assets as fears grew that Erdoğan’s increasingly authoritarian stance and detention of his biggest rival will destabilize the country, a North Atlantic Treaty Organization member.
The Turkish lira
USDTRY
+0.06% at one point was down 14.5% to a record low of more than 42 versus the greenback, though later it was trading down 6.2% at 38.95.
Timothy Ash, a strategist at BlueBay Asset Management, called it a “killer blow” to the Turkish central bank’s fight against inflation as the lower lira raises import prices.
Inflation in February was 39%, which nonetheless is substantially down from the 75% inflation rate in May, according to government statistics.
The BIST 100 equity index
XU100
+0.49% in Istanbul fell 5.9%, though it remains up 3.6% for the year to date. The U.S.-listed iShares MSCI Turkey ETF
TUR
+0.21% was down 10% in premarket action.
Ekrem İmamoğlu, mayor of Istanbul since 2019, was expected on Sunday to be nominated as the Republican People’s party presidential candidate for elections due by 2028. Opinion polls show him ahead of Erdoğan if a poll were held for Turkey’s top office.
But on Wednesday the state-run Anadolu news agency said that İmamoğlu had been detained as part of an investigation into alleged links to terrorism related to support he may have received from a pro-Kurdish political group in his re-election as mayor of Turkey’s largest, but not capital, city in 2024.
Turkish LiraSource: Tullett Prebon
2021'2501020304050
In a voice message shared by his office, İmamoğlu said: “Hundreds of police are at my door. … This immoral and tyrannical approach will undoubtedly be overturned by the will and resilience of our people.”
The arrest of İmamoğlu also raises concerns about the broader reform agenda in Turkey, according to William Jackson, chief emerging-markets economist at Capital Economics.
“In part, that’s because it points to a weakening of institutions and the rule of law in the country. But it’s also because it suggests that political rather than economic concerns may be starting to dominate President Erdoğan’s thinking,” Jackson said.
