Arrest fuels Turkish lira’s record decline

Shafaq News/ Turkiye intervened in the foreign exchange market on Wednesday after the lira plunged nearly 10%, hitting a record low of 40 per US dollar.

To contain losses, Turkish banks sold approximately $8 billion in foreign reserves, Bloomberg reported. The sell-off deepened after authorities detained Istanbul Mayor Ekrem İmamoğlu on corruption charges and alleged ties to the Kurdistan Workers’ Party (PKK), a group designated as a terrorist organization by Turkiye.

His arrest, which heightened political uncertainty, fueled a wider market sell-off. The lira’s sharp decline triggered a suspension in stock market trading as equities plummeted. Government bond yields surged to their highest levels this year as investors offloaded Turkish assets, deepening concerns over "political instability" and potential "government intervention in financial markets."