The Turkish lira plunged to a historic low of 42 per dollar on Wednesday, with bonds and stocks also suffering sharp declines following the detention of President Recep Tayyip Erdoğan’s key political rival, Istanbul Mayor Ekrem İmamoğlu.
After reaching the record low, the lira slightly recovered, trading at 39.3 per dollar.
Turkey’s international government bonds also saw significant pressure, especially long-maturity bonds, which experienced sharp drops. Dollar-denominated bonds maturing in 2045 dropped by 1.6 cents to 85.078 cents, marking the largest one-day decline since the beginning of 2024.
Turkish stocks followed suit, with concerns over the rule of law reflecting in market behavior. The Istanbul Stock Exchange temporarily halted trading after the BIST 100 index fell by 6.87% at the opening.
Experts predict that the downturn in the stock markets may persist in the near future.
