Meta Description: Bloomberg reports that Turkish state banks sold $5 billion after the cancellation of the CHP Istanbul Provincial Congress triggered heavy selling in Borsa Istanbul and pressure on the Turkish lira.
Political Shockwaves Hit Turkish Markets
According to Bloomberg, Turkey’s state-owned banks were forced to step in with $5 billion in dollar sales after the sudden cancellation of the CHP Istanbul Provincial Congress sparked panic among investors.
The decision immediately weighed on markets. Borsa Istanbul slid sharply, with overall losses topping 5 percent, while the banking index dropped more than 7 percent. At one point, the benchmark BIST 100 index dipped to 10,616.64 points.
Uptick Rule Applied to Limit Losses
To contain volatility, Borsa Istanbul enforced the “uptick rule” across all short-selling trades in the BIST 100 index throughout the day. Despite the restriction, pressure on the Turkish lira remained intense as investors exited local assets.
State Banks Intervene with Dollar Sales
Bloomberg journalists Kerim Karakaya, İnci Özbek, and Beril Akman reported that Turkish state banks sold roughly $5 billion across Wednesday and Thursday to stabilize the lira. The bulk of these interventions occurred on the first day, right after the congress cancellation.
Echoes of March 19 Market Turmoil
The article also drew parallels with March 19, when Istanbul Mayor Ekrem İmamoğlu was detained. On that day, nearly double this amount of dollars was sold by state banks, and in the following weeks, the Central Bank’s reserves fell by more than $50 billion.
Political Risks and Market Fragility
This latest intervention highlights how political instability continues to fuel financial turbulence in Turkey. Each major political event is mirrored by sharp swings in the stock market, a weaker lira, and costly interventions by state banks to calm investors.
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