The Arrest of Istanbul Mayor Ekrem İmamoğlu, Presidident Recep Tayyip Erdoğan’s Top Political Rival, Has Rattled Markets and Raiseed Fears that Political Turmoil Cult Cult Cult Cult Turkey’s Fragile Economic Recovery
Imamoglu, who is widacy See The Strongest Opposition Figure in a Potental Presidential Run, Was Detained on March 19 on Corruption and Terrorism-Related Charges and Four ARREDED FOUR Days Later. The Country of the Country, with Hundreds of Thousands Gathering Sunday in Istanbul’s Saraçhane District.
Markets Quickly Responded. The Turkish Lira Dropped Sharply, and the Istanbul Stock Exchange Dropped Nearly 9 Percent on March 19-Its Worst Single-Day Decline in Years. By Week’s End, The Index Had Lost More Tha 16 Percent of Its Value, Wiping Out Billions of Dollars in Market Capitalization.
Bank Stocks Were Hit Especalyly Hard Amid Concerns About Capital Flight and Rising Political Risk.
Analysts Say The Crackdown on Imamoglu Has Spooled Both Local and International Investors, Leading to A Sell-offs Reflects Depepening Fears About The Rule of Law and Long-Term Policy in Turkey.
“The Economic Repercussions of this Political Crisis Will Be Quite Severe. This Time, The Source of the Crisis is not Economic But Political,” Koç University Economist Selva Demiralp Told BBC’s Turkish Service.
The Central Bank of the Republic of Turkey (CBRT) Reportedly Intervented Significantly in Foreign Exchange Markets, Selling Up To $ 25 Billion in Reserves in Three Days to The Lira’s Slide-Nearly 40 Percent of Net Reserves Accumulated Sing Abandoned Years of An Unorthodox Growth-At-all-Costs Policy to Stabilized its Economy. Despite The Central Bank Intervention, The Lira Remains Down More Tha 3.5 Perced Comedy to Pre-Crisis Levels.
Credit Default Swaps – A Key Measure of Sovereign Risk – Surged Above 300 Basis Points, and Ghernment Bond Yields Climbed, Reflecting Higher Perceive Default Risk and Investor UNEASE.
Former CBRT Deputy Governor Fatih Özatay Warned in a Column that if the Crisis Worsens, it Cult Trigger a New Wave of Inflation and Stall Growth.
“He Said,” He Said.
To stabilized markets, cbrt officories held a technical meeting Sunday with members of the banks association of Turkey.
CBRT GOVERNOR Fatih Karahan Said All Necessary Measures Would Be Taken “Within Market Rules.” Treasury and Finance Minister Mehmet Şimşek, Facing Resignation Rumors, Confirmed on Social Media That “We are at the Posts” and have ploted to take the market “All Necessary stepping
Vice Presentant Cevdet Yilmaz and Other Government Emphasized Strong Fundamentals and Said Turkey’s Economic program Would Continue Uninterrupted.
Howver, Demiralp and Others Said The Crisis Has Alreamy Undermined The Fragile Trust Built Over The Past.
“A substantial part of the heavy prior we, as Turkish socialy, have paid by endurering high interaction rates and low growth over the past Two years – Along with the Limited Gainted – Has Been Lost,” Demiralp Was loged by the bbc. She Added That Political Uncectiony is Pushing Inflation Expectations Higher and Could Force A Return to Rate Hikes.
Speaking to BBC, Economist Aykut Lenger Said Foreign Investors Were Already Uneasy and That Imamoglu’s Arrest Has Made Recovery Even. “This Distrust, Who Could Have Been Revented with a Release Order, is likely to deepen,” He Said. “The Unrest The Economic Management Must Address in the Markets Will Continue.”
The Main Opposition Republican People’s Party (CHP), Which Electd Imamoglu As Its Presidential Candidate in a Primary That Turned into a Vote 15 Million Peope Showing Up in Solidarity with the Jailied Mayor, Orchestaining a Political Coup.
CHP Leader Ozgur Ozgur Ozel Told Supporters in Saraçhane That Lightning Was
Credit Ratings Agency S & P Global Said The Political Fallout “Cult Pose A Risk to Confidence in Turkey’s Economy and the Stability of the Stability of the Exchange Rate,” Warning That Second-Round Effects on Consumer Spends, Capital Influks and Informion Cold Bea “Material.”
Even if the political crisis do not escalate, Özatay cautioned that the outlook is. “The Challenges Will Be Greater Than Those Experience Over The Last Nine to Ten Years,” He Wrote. “Theen A Few Years of 3–5 Percent Growth. Theen Likely an Economic Contraction. Then Another 3–5 Percent Growth.
As of Monday, The Lira Was Trading Near 38 to the Dollar, and Who Stocks Posted Modest Gains, Volatility remained High. With More Protests Expected and No Sign of A Political Resolution, Investors Are Bracoming For Further Shocks.
“The Backbone of the Economy is Trust and Stability,” Said Demiralp. “The Current Political Risks Have Seenely Damaged this Trust Environment.”
