Turkey: Protests will not dislodge Erdogan, 6 reasons why

• Pro-Imamoglu protests will not dislodge Erdogan: 1) foreign leverage, 2) armed forces loyalty, 3) FX reserves buffer ...

• ... 4) AK party support base, 5) pro-Kurdish DEM party swing, 6) lead time before next election (due by May 2028)

• Turkey assets already reflect a lot of risk: eg cheapest equity market in Europe and MENA. But not for the faint-hearted

  
  

Turkey has engaged a series of policy (FX intervention, overnight lending rate hike) and regulatory (short-selling ban extended to largest stocks, looser share buyback and margin trading rules) responses to mitigate the negative market effects (loss of confidence, foreign capital flight, dollarisation of local deposits) of large scale protests. Those protests have mobilised in response to the authoritarian lurch last week — the arrest and jailing of President Erdogan's main political rival, Istanbul Mayor Ekrem Imamoglu from the opposition CHP.

The effectiveness of those measures, in the short-term, remains to be seen. At the time of writing, the currency is down 0.6% and the local equity index (Borsa Istanbul 100) is up c2.6% (in US$ terms) on 24 March.