Turkish lira hits record low after opposition leader's arrest

The Turkish lira has just fallen to an all-time low against the US dollar, trading at 40.96 before recovering slightly to 38.74 following the arrest of Istanbul Mayor Ekrem Imamoglu. Imamoglu, a prominent opposition figure and potential presidential candidate, has been arrested on terrorism and organised crime charges - charges he denies.

Political instability fears

News of the arrest has rocked Turkey's financial markets. The country's BIST 100 stock index fell as much as 7%, reflecting investor concerns about the political situation and the future of the Turkish economy. Imamoglu's arrest was seen as a direct attack on the opposition, with the Republican People's Party (CHP) denouncing it as an attempt to undermine the democratic process. The CHP has declared the incident a political "coup attempt" aimed at preventing Imamoglu from running for office.

Unstable political and economic landscape

With the CHP primary scheduled for March 23, where Imamoglu is seen as a leading candidate for president, his arrest has created new tensions in Turkey's political system. This uncertainty has added pressure to the lira, which has weakened significantly in recent years due to high inflation and controversial government fiscal policies.

The shift to cryptocurrencies

In the face of economic hardship, many Turks have turned to cryptocurrencies such as bitcoin and USD stablecoins to protect the value of their assets. With the continued devaluation of the lira, cryptocurrencies are becoming a popular choice for many to protect their personal finances against domestic market volatility.