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Turkish stocks plummeted on Friday after thousands of people took to the streets of Turkey’s largest cities overnight to protest against the arrest of the main political challenger to President Recep Tayyip Erdoğan.
The fall in markets and the rare show of public anger against Erdoğan underlined a deepening political crisis following the detention of Istanbul’s popular mayor Ekrem İmamoğlu on Wednesday over alleged terrorism and corruption charges.
The Istanbul bourse’s benchmark index of the 100 biggest Turkish stocks fell 6 per cent, taking losses for the week to more than 15 per cent and putting it on track for the biggest weekly decline since 2008.
The lira has fallen about 3.6 per cent since İmamoğlu’s arrest, after briefly touching a record low against the dollar, but has steadied as the central bank propped up the currency and raised its overnight lending rate.
The market losses reflect investors’ concerns about Erdoğan’s commitment to the rule of law, as well as to reforms overseen by finance minister Mehmet Şimşek that had begun to cool runaway inflation and ease an economic crisis.
İmamoğlu was arrested days before he was to be selected as presidential candidate for the opposition Republican People’s party (CHP), and he has accused Erdoğan’s government of “weaponising the judiciary” to stay in power.
The CHP had said it planned to name İmamoğlu as its candidate in a bid to pressure Erdoğan, who has steered the country down a path of creeping authoritarianism, into early elections.
Özgür Özel, the CHP’s leader, on Thursday made a rare call for opposition supporters to take to the streets until İmamoğlu is freed, after describing the arrest as “a coup against the next president”.
“In the coming period, no one should expect the Republican People’s party to do politics in the halls, in the buildings,” Özel said on Thursday night outside Istanbul’s municipality headquarters where protesters gathered. “From now on, we are on the streets and in the squares.”
Protests also took place in Ankara, İzmir and other cities.
Erdoğan, a strongman who has towered over Turkish politics for more than two decades, accused the opposition of “deceiving the people” by blowing İmamoğlu’s arrest “out of proportion”.
Market bets on Turkey’s creditworthiness also deteriorated on Friday, as the price of five-year default protection on the country’s bonds rose to 300 basis points, up from 250bp.
The economy had begun to stabilise after Erdoğan retreated from his unorthodox monetary policies, including his refusal to raise interest rates even as the country headed towards hyperinflation. He appointed Şimşek and a new central bank team to overhaul the economy following the 2023 elections, but the gains they have made are now coming under pressure.
Dozens of people have been detained since the police launched a dawn raid on İmamoğlu’s home.
Interior minister Ali Yerlikaya said on X on Friday that 53 people were “processed” for damaging public property and for “resisting against [official] duty” the previous night. He said 16 police officers were hurt in the protests amid reports of clashes in Istanbul and Ankara.
Yerlikaya added that the number of social media owners accused of posting incitement to hatred and crimes to their accounts was 326.
After İmamoğlu’s arrest, the government banned demonstrations in Istanbul for four days, which on Friday was extended to Ankara and İzmir. It has also restricted access to social media platforms including X, Instagram and YouTube, global internet monitor NetBlocks reported.
State media said the alleged terrorism charges against İmamoğlu were linked to possible support from a pro-Kurdish political group for his 2024 mayoral re-election campaign.
Turkey has been fighting a four-decade insurgency against Kurdish separatists. But there are also legal Kurdish-dominated political parties in the country, although they often face harassment from the authorities, including the arrest of their members.
The authorities have detained hundreds of people in recent months, including mayors from the pro-Kurdish Dem party and CHP, a centrist secular party that was established by Mustafa Kemal Atatürk, the founder of the modern Turkish republic.
The crackdown has come as Erdoğan’s allies have been campaigning to change the constitution to enable him to run for a third presidential term in 2028.
Under Turkey’s anti-terrorism law, İmamoğlu can be detained for up to four days without charge, meaning he has to be charged or released on Sunday.
https://www.ft.com/content/1b31ad5e-1add-4f1d-a11e-43699ee7f0c2
