FX.co ★ Turkish Stocks Extend Decline

In April, Turkey's BIST 100 index dropped below the 9,400 level, marking a more than 6% decline since the beginning of the year, as companies contended with ongoing political upheaval and rising borrowing costs. The initial market downturn was sparked by the detention and sentencing of Istanbul’s mayor, Ekrem Imamoglu, a prominent figure in Turkish politics and a key opponent of President Erdogan, on charges of corruption. Imamoglu's arrest, coupled with the annulment of his university diploma, is anticipated to prevent him from challenging Erdogan in the forthcoming elections. The steep fall of the Turkish lira prompted the Central Bank of Turkey to unexpectedly hike its key interest rates, contrary to market expectations that rates would remain stable. This move was part of broader efforts, including an emergency overnight lending rate increase and $50 billion in foreign exchange market interventions, aimed at mitigating the selloff.