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Turkey sought to calm international investors on Tuesday amid days of protests sparked by the arrest of President Recep Tayyip Erdoğan’s chief rival last week.
The jailing of Istanbul mayor Ekrem İmamoğlu, the country’s most popular politician, caused political and financial turmoil after igniting the biggest public protests in more than a decade and prompting investors to sell Turkish assets.
Finance minister Mehmet Şimşek and central bank governor Fatih Karahan held a conference call with international investors on Tuesday to reassure them they would stick with the government’s recovery programme for the $1.3tn economy.
One investor familiar with the call said the government presented figures showing that a majority of the outflows from the Turkish lira were hedge funds forced to sell highly leveraged positions. Retail outflows by Turkish locals had so far been a small factor, according to these figures.
“If the flighty money has left, and the remainder is ready to sit tight, then the Turkish central [bank] can probably weather another episode like this again — although it would be difficult,” said another fund manager who attended the call.
He added that the central bank said it had sold $25bn of foreign currency reserves to bolster the lira after investors fled Turkish assets last week, with Friday the heaviest day of selling. The finance ministry said about 4,500 international investors attended the call.
Turkish markets appeared to steady on Tuesday, with the Istanbul stock market up almost 4.5 per cent after the call ended, and the lira up a hair at 37.9 to the US dollar.
İmamoğlu’s arrest on March 19 on corruption charges, which he denies, was a dramatic escalation in Erdoğan’s crackdown on the opposition. Tens of thousands of people have taken to the streets, fearing that Turkey’s longest-serving leader has become autocratic.
The 71-year-old president has called the protests “street terrorism” and insisted that the judiciary acted independently against İmamoğlu.
Police have detained 43 “provocateurs” and were seeking more suspects after protesters allegedly made “vile insults against our president, his late mother and family”, interior minister Ali Yerlikaya said on X early on Tuesday.
At least 1,133 other people have been arrested at protests around the country. A journalists’ union said police had raided the homes of 11 reporters and photographers covering the demonstrations and taken them into custody on Monday.
CHP party leader Özgür Özel, leader of the main opposition Republican People’s party (CHP), said that a rally on Tuesday night would be the last outside Istanbul’s city hall and that the city council on Wednesday would elect a CHP member to stand in for İmamoğlu in an effort to prevent the government from seizing control of the municipality.
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Özel on Tuesday visited İmamoğlu in a prison west of Istanbul, where several political dissidents are held. He described the mayor and two other CHP mayors arrested with him as having their “heads held high”.
“I’m ashamed in the name of those governing Turkey for the situation it is in,” he said outside Silivri prison. “They thought it would be so easy to say, ‘Since I can’t and won’t be able to defeat İmamoğlu, I will just get rid of him’. They didn’t take into account” the backlash, he said.
The CHP has called on supporters to shun companies it says back Erdoğan’s government, ranging from a chain of coffee shops to booksellers and a tour operator.
The party has tapped into malaise over the economy, with inflation running at almost 40 per cent. In municipal elections last year, the CHP won the largest vote share nationwide, delivering Erdoğan’s biggest setback in two decades.
İmamoğlu defeated Erdoğan’s handpicked candidate for mayor of Turkey’s largest city, winning re-election by more than 11 percentage points. He has consistently outperformed Erdoğan in surveys of voters’ next choice for president, though elections are not scheduled until 2028.
