Turkey: Imoglou arrest is affecting the economy

Turkish authorities arrested the president’s top political opponent Recep Tayyip ErdoganEkrem Imamoglou, on the charge of corruption, causing shares and pounds, according to Bloomberg.

Constantinople Mayor Eremm Imamoglu, the most popular Turkish politician and who could one day call into question the President’s power, was detained on Wednesday, prompting protests by opposition party members.

The mayor’s detention highlights an ever -aggressive campaign that Erdogan is conducting against critics in order to silence the dissenters.

He also needs to broaden his support for support in parliament in order to have a chance of claiming his office again, having reached the constitutional limit of the two terms. The investigation against his most powerful contender serves as a strong reminder of the dangers of investing in Turkey, where assets have declined the largest decline in the world.

Authorities have announced that they were spent up to $ 9 billion less than a day to support the pound, which showed some signs of stabilization, as investors bet that the risk of overthrowing economic policy remains limited.

Erdogan « always said that he respects the electoral process and the limits of his term. What happened this week puts it under fundamental challenge, « said Richard Segal, an analyst at Ambrosia Capital in London. « With this in mind, it is probably an ongoing appreciation, rather than an ongoing deterioration of the market climate and economic policies should remain Orthodox. »

Chaos on the market after arrest Imoglou

Finance Minister Mehmet Simsek, whose decision to participate in the Erdogan government two years ago gave the markets to intervene to reassure investors, saying that the government’s economic policy remains unchanged.

« The financial program we implement is continuing with determination, » he told X.

Finance Minister Mehmet Simsek

This failed to mitigate the fall of shares and state debt. The country’s shares fell so abruptly that they had twice a break in transactions, with the Borsa Istanbul 100 reporting closing 8.7% in Constantinople – the steepest drop in the last four years. In New York, the Ishares MSCI Turkey Exchange Traged Fund fell 12%.

The yield of 10 -year -old government bonds in pound was ejected by 255 basis points to 30.74%.

The pound weakened up to 11% before it limited its losses to 3.2% to 37,8952 per dollar in Istanbul. The coin stability was backed by the intervention of the country’s banks, which sold between $ 8 and $ 9 billion on Wednesday, a Central Bank official told Bloomberg with immediate knowledge of the issue.

The bank « closely monitors developments in currency markets and intervenes against volatility when it deems it necessary, » the official said, demanding that he not be named, citing the sensitivity of the issue.

The seriousness of the latest political crisis means that market recession can take longer than many predicts, according to Bernd Berg, London -based strategic analyst.

« I think the news from Turkey is shocking and will put Turkish assets under strong sales pressure for the coming months, unless President Erdogan changes course, » Berg said, adding: « For me it is deja-vu, it reminded me of the last few times.

Imoglou’s degree

The day before Wednesday’s investigation is released, authorities decided to recall Imamoglou’s university diploma, citing irregularities. If it is finalized, this would only prevent the mayor from questioning Erdogan in future elections, as a university degree is required to put a candidacy for the president.

Erdogan with Imamoglou

A conviction for current charges, including corruption and corruption, would also deprive him of the right to hold a national office.

Imamoglu, who has already defeated Erdogan’s fine candidates in the municipal elections twice in the last six years, said police have been used as a weapon to end his political career prematurely. The main party of the Opposition Chp was to appoint him on Sunday as his candidate president.

The Turkish authorities have banned any protest, gathering and press conference for four days to prevent mass rallies. National television media showed footage from a group of students protesting in front of the University of Constantinople, where Imamoglou got his degree.

Reactions

MPs of the opposition party also protested his detention in the Turkish plenary, ending parliamentary meetings.

The investigation against Imamoglou follows the arrest of Umit Ozdag, leader of a small nationalist party and a fierce critic of Erdogan.

Investigations have also trapped other politicians, journalists, and even a famous agent earlier this year. Former Kurdish leader Selahattin Demirtas has been imprisoned for years after his decision to challenge Erdogan in the presidential election.

The next elections are officially set for 2028.

In order to have the opportunity to extend his more two decades to power – as prime minister and then as president – Erdogan will have to secure capable parliamentary support to change the Constitution or call early elections. He has repeatedly said that he will not claim another term, but his political allies, including members of the ruling AKP party, say Erdogan should remain in power.