The Turkish lira remained on edge on Monday as the political crisis in the country continued after more politicians, journalists, and activists were arrested. The USD/TRY exchange rate was trading at 37.7 on Monday, down from last week’s high of 39.80.
Lira plunges against euro and pound as BIST 100 index falls
Similarly, the EUR/GBP pair dropped to 41.20 from the year-to-date high of 43.40, while the GBP/TRY has dropped from last week’s high of 50.90 to 49.10. These forex pairs are all nearing their all-time highs after decades of soaring as the BIST 100 index has plunged by over 14% from its highest point this year, meaning that it has moved into a technical correction.
The Turkish lira has plunged after President Recep Erdogan arrested Ekrem Imamoglu, his main rival and the mayor of Istanbul. This action, coupled with other arrests, have raised concerns that Turkey was moving towards outright autocracy.
Ekrem has now been charged with corruption and removed from being the mayor of the biggest city in the country. In an X post, he warned that the country was suffering from a great betrayal and that he was a victim of extrajudicial execution.
Analysts believe that the ongoing arrests stem from last year’s municipal elections in which the opposition won convincingly. As such, Erdogan believes that failure to crack down on the party risks his party in the next election.
