Turkish Lira Touches Record Low, Stocks and Bonds Slide After Istanbul Mayor Detained 

24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
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Turkish Lira Touches Record Low, Stocks and Bonds Slide After Istanbul Mayor Detained 

24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)
24 May 2018, Türkiye, Istanbul: Turkish lira bills are seen fanned out. (dpa)

Türkiye's lira fell as much as 12.7% and touched a new all-time low of 42 to the dollar on Wednesday, with bonds and stocks also tumbling sharply, after authorities detained President Recep Tayyip Erdogan's main political rival.

The move against Ekrem Imamoglu, the mayor of Istanbul, was called "a coup attempt" by the opposition and appears to cap an aggressive months-long legal crackdown on opposition figures across the country which has been condemned as a politicized attempt to silence dissent.

Imamoglu was expected to be named as the main opposition's presidential candidate within days.

The lira traded at 38.90 to the dollar at 1016 GMT, from a close of 36.67 on Tuesday, having recouped some of the losses from the all-time low it hit earlier - but still having had its biggest decline since July 2023. The earlier tumble to 42 marked one of the lira's largest absolute intraday moves on record.

Türkiye's international government bonds also came under pressure with longer-dated maturities suffering the sharpest falls. The 2045 maturity fell 1.6 cents to be bid at 85.117 cents, its lowest level since

"In Türkiye this morning, bonds and FX are coming under pressure after a potential presidential candidate, the mayor of Istanbul, was arrested," said Frantisek Taborsky, EMEA FX & fixed income strategist at ING.

"(Türkiye's lira) is the most heavily positioned carry-trade in the emerging markets space at the moment in our view, and a sharp move could potentially lead to further outflows. On the other hand, we should see local banks providing some FX support."

MONETARY POLICY

Finance Minister Mehmet Simsek said they were doing everything necessary to ensure healthy functioning of the markets, without giving further details.

Bankers calculate that the Turkish central bank sold a minimum of $5 billion in FX after lira's crash, while some say it may have already reached $10 billion for the day.

Analysts and investors were also concerned about the knock on effect for monetary policy, worrying that the sharp decline in the lira could delay or halt the rate-cutting cycle since the central bank has been ensuring real appreciation of the currency for months.

The central bank had in December embarked on an easing cycle for the first time after an 18-month tightening effort that reversed years of unorthodox economic policies and easy money championed by Erdogan, which had seen the economy run red hot and inflation exceeding 70%. Erdogan has supported the steps by the central bank for a more orthodox policy.

"With this FX shock they need to keep rates where they are for now," one banker said.

Stocks also crashed, reflecting investor worries over rule of law. Turkish blue-chip stocks fell by nearly 6%, set for their worst daily performance since late 2023.

The banking sub-index declined 9.67%. Borsa Istanbul said trading was halted temporarily after the main BIST 100 index fell 6.87% in early trading and the market-wide circuit breaker was triggered.

"A wave of selling was triggered after Imamoglu's diploma was annulled and he was detained. There have been foreign investor inflows in recent days ... but political uncertainty currently prevails and concerns about foreign investors leaving the country have increased," Serhat Baskurt, algorithmic operations manager at ALB Yatırım, said.

Baskurt said he expected the decline on the stock exchange to continue over the coming days.

Borsa Istanbul said that the uptick rule on short sale transactions for the BIST 50 index would be used on Wednesday. The rule requires short sales to be conducted at a higher price than the previous trade.



Egypt Seeks Up to 60 LNG Shipments

A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
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Egypt Seeks Up to 60 LNG Shipments

A general view of the Nile River from the Egyptian capital, Cairo (Reuters).
A general view of the Nile River from the Egyptian capital, Cairo (Reuters).

Egypt is in advanced talks with global energy and trading firms to secure between 40 and 60 shipments of liquefied natural gas (LNG), aiming to meet urgent energy needs before summer demand peaks, according to sources familiar with the matter cited by Reuters.
Cairo is negotiating with companies including Saudi Aramco, Trafigura, and Vitol for LNG supply deals extending through 2028, signaling a strategic shift from exporter to long-term importer amid declining domestic production, Asharq Bloomberg reported.
Sources say the Egyptian Natural Gas Holding Company (EGAS) has received 14 bids for supply contracts ranging from 18 months to three years. The rising demand this year could push Egypt’s monthly LNG import bill to nearly $3 billion starting in July, up from approximately $2 billion last year.
This move reflects Egypt’s effort to lock in long-term contracts to reduce exposure to volatile spot market prices. It also underscores the country’s deepening energy challenges: a sharp drop in gas production, increasing population, and soaring summer temperatures are straining domestic supply and forcing reliance on global markets.
Contract awards are expected next week. Plans call for 110 LNG shipments in the second half of 2025, 254 in 2026, and 130 in the first half of 2027.
One source said bids price LNG at 80 to 95 cents per million British thermal units (MMBtu) above the European benchmark, with payment deferrals of up to 180 days. European gas futures currently trade at about $12 per MMBtu, though LNG cargoes typically sell at a discount.
Egypt is also expanding infrastructure, including the addition of floating storage and regasification units, and is negotiating long-term supply deals with Qatar.
A recent Goldman Sachs report estimated Egypt’s 2024 energy deficit at over $11.3 billion, doubling the current account shortfall to 6.2% of GDP, compared to 3.2% the previous year.
President Abdel Fattah al-Sisi has directed the government to preempt power outages this summer, according to a presidential statement this week.
A government source told Reuters Egypt is also considering importing at least 1 million tons of fuel oil, though LNG remains the preferred option due to its more flexible financing.
With gas output in February hitting its lowest level in nine years, Egypt imported 1.84 million tons of LNG in early 2025—roughly 75% of total 2024 imports, according to S&P Global Commodity Insights.