Istanbul Municipality Mayor Ekrem İmamoğlu speaks at the 19 May Commemoration of Atatürk, Youth and Sports Day celebrations held at the Maltepe Event Area on May 19, 2023 on Istanbul, Turkey.
Hakan Akgun | Getty Images
The Turkish lira fell to a record low against the dollar and the country’s benchmark stock index dropped by as much as 7% following the surprise arrest of Istanbul mayor Ekrem Imamoglu — a rival of Turkish President Recep Tayyip Erdogan and leading opposition party figure — on charges he denies.
The lira was trading as low as 40.96 to the U.S. dollar, according to Refinitiv data, before moving to 38.74 by 12:47 p.m. in Istanbul, with the greenback up 5.53% on the long-embattled Turkish currency. The BIST 100 stock index had pared losses after being down as much as 7% earlier in the morning.
Imamoglu, who won the mayorship of Turkey’s most populous city in April of 2023, was arrested on charges including terrorism and organized crime, according to state media outlet Anadolu, which cited the Istanbul Chief Public Prosecutor’s Office. The news agency reported that prosecutors also issued warrants for 100 other people in Imamoglu’s political party.
The popular 53-year-old mayor was seen as the next opposition party candidate for the Turkish presidency. Imamoglu’s Republican People’s Party (CHP), Turkey’s main opposition party, was set to hold a primary election on March 23, during which Imamoglu was widely expected to emerge as the group’s presidential candidate.
In a statement, the CHP flatly rejected the charges against Imamoglu, calling the move a coup.
“Making decisions on behalf of the people, using force to replace the will of the people or to obstruct it is a coup,” Ozgur Ozel, CHP chairman, wrote in a Google-translated post on the X social media platform.
“There is currently a force in place to prevent the nation from determining the next president. We are faced with a coup attempt against our next president.”
CNBC has contacted the Office of the Turkish Presidency for comment.
Imamoglu on Wednesday posted a video on X along with the caption, “The will of the people is being dealt a blow.”
‘An artificial attempt to manipulate politics’
Access in Turkey to numerous social media sites has been curtailed, according to internet monitoring site Netblocks, which said its live metrics showed restrictions on X, YouTube, Instagram and TikTok.
Criticism of the arrest and warrants was swift, with many pointing out the timing — just days before Imamoglu’s expected nomination as presidential candidate for his party.
“This is an artificial attempt to manipulate politics,” Can Selcuki, managing director of consultancy Research Istanbul, told CNBC. “It never worked in the past, and only will cause Turkey to lose time” in terms of its economic recovery and democratic progress, he said.
Turkish President Recep Tayyip Erdogan.
Anadolu Agency | Anadolu Agency | Getty Images
Other country analysts say that Erdogan, who has held the Turkish presidency since 2014, sees Imamoglu and any other high-profile critics of his rule as threats.
“Once again, it is all about Erdogan and his re-election,” read the title line of an analysis note by Wolfango Piccoli at consultancy firm Teneo Intelligence in the wake of the news.
“Recent opinion polls have consistently showed that Imamoglu would defeat Erdogan in a presidential election,” the report read. “Imamoglu’s detention comes amid increased uncertainty, a heightened climate of fear in Turkey, and will reinforce a growing sensation among Erdogan’s critics and opponents that no one is safe.”
It added that Erdogan, who was previously criticized for infringing on democratic rights and institutions , likely feels empowered by recent geopolitical developments.
“Erdogan is emboldened by Turkey’s growing importance for European security and U.S. President Donald Trump’s return to office to neutralize his domestic opponents,” Piccoli wrote.