After the arrest of Istanbul’s mayor, Turkish authorities rush to save the economy
Turkey's financial markets were shaken following the arrest of Istanbul’s opposition mayor. Authorities intervened urgently to prevent a collapse of the lira and the stock market.
Turkish authorities have taken urgent steps to stabilize the financial situation after the arrest of Istanbul Mayor Ekrem İmamoğlu, one of the country’s leading opposition politicians, according to Interfax-Ukraine.
İmamoğlu was detained on March 19 as part of an anti-corruption investigation. He is considered the main rival of the current government in the 2027 presidential election.
The news of the arrest sparked a wave of protests across the country. More than 1,000 people were detained during the demonstrations.
Amid political instability, the Turkish lira continued to fall — on Monday it lost 0.5% against the dollar, and last week it dropped by 3.1%. The Borsa Istanbul 100 stock index fell 17% last week but recovered 2.8% on Monday.
To support the lira, the Central Bank of Turkey urgently raised the overnight lending rate to 46%.
An auction of 91-day treasury bills was also held — the first in nearly 20 years. The Central Bank held a technical meeting with commercial banks to warn them of potential market volatility.
Other steps included a reduction in the tax on lira deposits, an expanded ban on short selling, and relaxed rules for stock buybacks.
The regulator also lowered margin requirements in an effort to halt the decline of the stock market.
Earlier, Turkish President Recep Tayyip Erdoğan stated that opposition forces are deliberately provoking protests in the country under the guise of political demands, warning that the government will respond firmly to such actions.