FX.co ★ Turkish Lira Continues to Fall

The Turkish lira has continued its decline, reaching unprecedented lows by trading above 37 against the US dollar, amid escalating political unrest in Turkey. The situation intensified following the formal arrest and sentencing of Istanbul's mayor, Ekrem Imamoglu—a prominent political figure and key adversary to President Erdogan—on charges of corruption. Last week's events, including the revocation of Imamoglu's university diploma, are anticipated to bar him from challenging Erdogan in the forthcoming elections. This move has ignited widespread demonstrations and triggered a significant sell-off of Turkish assets. Imamoglu was expected to be the presidential candidate for the Republican People’s Party (CHP), Turkey’s primary opposition. In response to stabilize the financial markets, the Central Bank of Turkey held an emergency meeting and increased the key overnight lending rate by 200 basis points to 46%. Additionally, it has engaged with the nation's leading financial institutions in a bid to mitigate the repercussions of the political turmoil.