Turkey in Turmoil! Stock Market Halts Trading, Lira Plunges to Record Low

TradingKey — On March 19, Turkish President Recep Tayyip Erdoğan’s main political rival, Istanbul Mayor Ekrem İmamoğlu, was abruptly detained by police, escalating political purges and triggering market turmoil that hammered Turkish stocks, bonds, and the currency.

According to media reports, Turkish police raided İmamoğlu’s residence and arrested him on charges of corruption, aiding terrorist organizations, and bid-rigging. More than others, including journalists and business figures, were also detained.

The arrest came a day after İmamoğlu’s university degree the previous day, citing alleged academic fraud.

İmamoğlu, a member of the opposition Republican People’s Party (CHP), was expected to be nominated as a presidential candidate this Sunday. He rose to prominence after defeating an Erdoğan-backed candidate in Istanbul’s mayoral election last year.

The political upheaval has sparked panic among domestic investors, who hold 62.5% of shares in Turkey’s stock market.

Turkey’s benchmark BIST 100 index plunged by 4.10%, triggering a temporary trading halt. The Turkish lira collapsed, with the USD/TRY exchange rate surging over 12% to 41.10—a historic low for the currency. Meanwhile, yields on Turkey’s benchmark government bonds spiked by roughly 100 basis points.

[USD/TRY Exchange Rate, Source: Investing.com]