Turkey’s Markets Crash Overnight
From opposition crackdowns to collapsing confidence, Turkey’s economy is paying the price.
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On the global stage, President Recep Tayyip Erdoğan portrays himself as the spearhead of a Muslim front against Israel, halting trade and issuing fiery declarations. But at home, he seems to be unable to maintain his economy in tact.
Following a court ruling focused on embezzling funds, panic sparked the markets: the BIST 100 index plunged nearly 6% before recovering slightly to close down more than 3.5%.
For foreign investors this is déjà vu. Just months ago, the arrest of Istanbul’s mayor and former presidential candidate Ekrem İmamoğlu triggered protests, capital flight, and forced the central bank to burn through $50 billion to stabilize the lira.
The opposition CHP warned these rulings are political and hurt the country's image as a functioning democracy, while analysts describe the judiciary as hollowing out what little competitiveness remains in Turkey’s democracy.
With Istanbul alone producing a third of the country’s GDP, the stakes are existential.
Perhaps, the trend will also hurt Ankara's attempt at establishing itself as a regional force.
Meanwhile, ordinary citizens are paying the price. As Erdoğan battles Israel abroad and silences opponents at home, Turkey’s currency weakens, investors run, and the matkets slip further into crisis.