Binance’s USDT/TRY trading pair saw its highest volatility since April 2024 after Istanbul Mayor Ekrem Imamoglu, a key rival to President Tayyip Erdogan, was arrested.
Turkey’s arrest of Istanbul Mayor Ekrem İmamoğlu, a key political figure, and potential 2028 presidential candidate, sent shockwaves through the country’s markets — sparking a sharp drop in the lira and a rush into crypto.
Shortly after the news broke, the lira took a quick nosedive, hitting a new all-time low in one of its worst intraday moves ever. Binance‘s USDT/TRY trading pair also saw wild price swings, spiking 6.4% in volatilityl what appears to be the highest volatility level since April 2024.
BtcTurk and Paribu, two of Turkey‘s biggest crypto exchanges, also saw an influx of activity, with daily volumes jumping 23.4% and 18.8%, respectively, per CoinGecko data, as a lot of traders seemingly rushed to hedge against the lira’s instability, a trend that’s played out before during economic uncertainty in Turkey.
Meanwhile, Borsa Istanbul, the sole exchange entity of Turkey, got hammered. The BIST 100 index dropped nearly 6%, its worst day since 2023, while the banking sub-index plunged almost 10%, forcing a temporary trading halt.
Turkish central bank offloads billions to save lira
In response to the lira’s rapid depreciation, Turkish authorities intervened in the foreign exchange market. Bankers reportedly estimate that the central bank may have sold between $5 billion and $10 billion in FX reserves to stabilize the currency. Such interventions, while potentially calming short-term volatility, raise concerns about the sustainability of Turkey’s foreign reserves.
On Wednesday morning, March 19, Turkish authorities arrested İmamoğlu on allegations of terrorism links, a move the opposition Republican People’s Party decried as a “coup attempt.” İmamoğlu was poised to become the party’s presidential candidate in the upcoming president elections in 2028, making his arrest particularly consequential.
The state-run Anadolu Agency reported that prosecutors issued warrants for Istanbul Mayor Ekrem İmamoğlu and around 100 others, including his close aide Murat Ongun. Authorities also sealed off several roads in Istanbul and imposed a four-day ban on demonstrations, seemingly to deter protests.
In a statement to Reuters, Emma Sinclair-Webb, the Turkey director for Human Rights Watch, called the arrest a “blatant misuse of the justice system” and part of a “pattern of politically driven investigations” meant to weaken the opposition.
Social networks face outages
Following the arrest, users across Turkey reportedly experienced widespread access issues on major social media platforms, including X, Instagram, YouTube, and TikTok.
Later on, NetBlocks, a watchdog organization that monitors cybersecurity and the governance of the Internet, confirmed in an X post that Turkey restricted access to multiple social media platforms.
Shortly after the news broke, the Turkish lira experienced a sharp decline, plummeting to an all-time low of 42 to the U.S. dollar, registering a staggering 12.7% drop.
International reactions to İmamoğlu’s detention came quickly. Germany’s government reportedly described the move as a “serious setback for democracy” in Turkey, with Foreign Ministry spokesperson Sebastian Fischer stating that the arrest was part of a broader pattern of “intensified legal measures to put pressure” on İmamoğlu, Deutsche Welle reports.
The central bank recently made a step toward more traditional monetary policies, which many saw as a good way to help stabilize the economy and bring in foreign investment. But now, with all the political unpredictability going on, there seems to be a real concern that these efforts might fall apart, potentially making it harder to attract the foreign capital Turkey desperately needs for its economic recovery.
