The Turkish government is doing everything necessary for the "healthy functioning of the markets," a top economy official said on Wednesday, as currency, stocks and bonds slid after authorities detained Istanbul's mayor on charges including corruption and terror links.
Ekrem Imamoğlu was arrested along with dozens of others in the early hours of Wednesday. Prosecutors say detentions are part of investigations into wrongdoings, ranging from corruption and bribery in public tenders to recruitment of people associated with the PKK terrorist group to political offices.
A statement from the Istanbul public prosecutor's office alleged that Imamoğlu was the leader of a "criminal organization" and that 100 suspects had been arrested. Among those detained was Imamoğlu's close aide, Murat Ongun, as well as two Istanbul district mayors.
"Everything necessary for the healthy functioning of the markets is being done, Treasury and Finance Minister Mehmet Şimşek said on social media platform X.
"The economic program we are implementing continues with determination."
The Borsa Istanbul Stock Exchange's benchmark BIST 100 index dropped by nearly 7% over the news, triggering a temporary halt to trading to prevent panic selling and stabilize the market. The index was last around 6% lower.
Borsa Istanbul said that the uptick rule on short sale transactions for the BIST 50 index would be used on Wednesday. The rule requires short sales to be conducted at a higher price than the previous trade.
The Turkish lira fell by as much as 12.7% at one point before paring some losses. It recouped some of the losses to trade at 38.90 to the dollar at 10:16 a.m. GMT, from a close of 36.67 on Tuesday.
The earlier tumble to 42 marked one of the lira's largest absolute intraday moves on record.
The 2045 dollar bond shed 1.6 cents in price to be bid at 85.078 cents, its largest one-day fall since early 2024.
The detention of Imamoğlu, a key figure within the main opposition Republican People's Party (CHP), came a day after authorities revoked his university diploma over his illegitimate 1990 transfer to Istanbul University from a private, unrecognized university in the Turkish Republic of Northern Cyprus (TRNC).
That could effectively disqualify him from running in the next presidential race as a university degree is a requisite for running in elections under Turkish law. Imamoğlu said he would challenge the decision.
