Türkiye's stock market and currency fell sharply on Monday, as foreign investors pulled back amid disappointing inflation data, political tensions, and broader anxiety about emerging markets. The Istanbul stock exchange's main index dropped roughly 4 percent to close at 40,269 points, following a similar decline the previous Friday. The lira fell to its weakest point in about 18 months, trading near 1.5 to the dollar.
April consumer prices climbed 1.34 percent month-on-month and 8.83 percent year-on-year, well above forecasts and raising doubts about the government's 5 percent year-end inflation target. Analysts also pointed to worries that the US Federal Reserve could raise interest rates again in June, which typically pushes investors away from higher-risk emerging markets.
Economy Minister Ali Babacan emphasized that external pressures, including rising US rates and surging oil and gold prices, were the primary drivers and had similarly affected Brazil and Mexico. A presidential veto of a pension reform tied to Türkiye's IMF program, plus concerns about stalled EU membership talks, added to investor unease.
Some analysts noted that a weaker lira could benefit exporters and help trim Türkiye's current-account deficit. Deputy Prime Minister Abdullatif Sener sought to reassure markets, saying the fluctuations remained "within predictable limits."
Historical summary. TurkishPress restated this wire report, first published in May 2006, in its own words.