The arrest of the Mayor of Istanbul and Erdogan controller Imamoglu shakes the Turkish financial markets strongly. The lira has been sagged at a record low and the stock market broke in.
The arrest of Ekrem Imamoglu, hopeful of the Turkish opposition and important opponent of head of state Recep Tayyip Erdogan, has shaken the financial markets. A few days before his planned appointment as presidential candidate, arrest warrant against the Mayor of Istanbul was issued. The political crisis exerts pressure on investors.
The Lira State currency sagged to a record low for the US dollar. In the meantime, more than 40 lira had to be paid for one dollar. The course rose by almost twelve percent. That was the biggest plus in around three years. The same was for the exchange rate of the euro: This rose by more than eight percent to over 43 lira for one euro.
On the stock exchange in Istanbul, the leading index Borsa Istansbul 100 broke up by almost seven percent. There was recently such a big break -in seven months ago. The index for the banking industry even crashed by more than nine percent. That made the greatest minus in two years. Turkish bonds also flew out of the depots in a high arc. The trade on the stock exchange was temporarily suspended in the morning.
Uncertain location: investors withdraw
“Turkish assets are under strong sales pressure,” said Piotr Matys, currency analyst at in Touch Capital Markets. Some investors are now being remembered that President Erdogan wants to consolidate his power even more. With this step, Erdogan attempts to prevent his greatest political rivals from running in the presidential elections up for 2028.
“In the past few days, there has been an inflow of foreign capital on the Turkish stock exchange,” said Serhat Baskurt, manager at the asset manager Alb Yatirim. These investors are deleted because of the politically uncertain situation. The descent of the Turkish stock exchanges is expected to last a few more days.
Turkish stocks had increased in early March
A key interest rate and hope for closer relationships with the European Union recently contributed to the fact that Turkish stocks had risen sharply at the beginning of the month. This plus has shrunk significantly due to the course slip on Wednesday.
Imamoglu was arrested in the early morning together with hundreds of other people, including business people and journalists. Among other things, he was accused of membership in a criminal organization and corruption, the state news agency Anadolu reported, citing the public prosecutor. It is about activities related to tenders from the city administration. The opposition spoke of a “coup d’état”.
