Turkish Market Turmoil: Stocks Plunge Amid Political Unrest

Turkish stocks faced their steepest drop since the 2008 financial crisis due to political tensions. The detention of President Erdogan's rival, Ekrem Imamoglu, has sparked widespread unrest. Despite central bank intervention, the lira remains volatile. Market reactions may curtail planned interest rate cuts.

Turkish stocks plunged sharply this week, marking the worst decline since the 2008 global financial crisis. The turmoil followed the detention of Istanbul Mayor Ekrem Imamoglu, President Erdogan's main political rival, which sparked significant political unrest.

The Turkish lira faced a 4% weekly slump despite concerted efforts by the central bank to stabilize the currency through aggressive financial measures, including selling $10 billion in foreign exchange reserves.

The political upheaval has dashed hopes for a planned interest rate cut in April, leading to skyrocketing interest rates and adding to uncertainty among investors. The central bank's unorthodox monetary measures aim to address dollarization risks among residents.

(With inputs from agencies.)