Turkish Markets Surge as Court Delays Critical CHP Leadership Trial
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A controversial graft case targeting Turkey’s main opposition party was postponed to September, calming political tensions and triggering a sharp rally in financial markets.
CHP Leadership in Jeopardy as Court Case Looms
An Ankara court on Monday adjourned a high-stakes hearing that could potentially annul the 2023 leadership election of the Republican People’s Party (CHP), where Özgür Özel replaced longtime leader Kemal Kılıçdaroğlu. The session was brief, and the judge postponed proceedings to September 8, citing jurisdictional issues.
The lawsuit stems from allegations of vote-buying at the November 2023 congress. If upheld, the claims could nullify the internal party election — a move that may reinstate Kılıçdaroğlu and further divide the CHP.
CHP has denied all allegations, framing the case as a politically motivated attempt to derail its growing influence.
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Imamoglu, Özel Targeted by Graft Allegations
Media reports suggest that several CHP figures — including jailed Istanbul Mayor Ekrem İmamoğlu — could face up to three years in prison and a political ban if convicted. İmamoğlu, widely seen as President Erdoğan’s top rival for 2028, was imprisoned earlier this year as part of what the CHP called a “judicial coup.”
“Today’s hearing was never about justice,” Özel said on social media platform X. “This is part of a calculated effort to block our path to power and weaken our will to fight.”
He linked the case to the March 19 removal of İmamoğlu, calling it a broader campaign to suppress the opposition.
Sarachane Protest to Mark ‘100 Days of Darkness’
The CHP has called for a mass protest on Tuesday at 5:30 p.m. GMT outside Istanbul City Hall, locally known as Sarachane, to mark 100 days since İmamoğlu’s removal. The square became a rallying point during spring protests, and Özel vowed: “We will never turn back. Sarachane is the heart of resistance.”
If the election result is overturned, Kılıçdaroğlu, now 76, has already expressed willingness to resume leadership — a scenario that has sparked deep division within the party.
Markets Rally as Uncertainty Temporarily Recedes
The Turkish financial markets responded immediately to the court’s decision. The BIST 100 benchmark index soared 5.4% by midday Monday, with the banking sub-index jumping 9.4%, boosted by optimism that a worst-case political scenario had been avoided.
Economists said the postponement reduced near-term political risk, clearing the way for long-anticipated monetary easing.
“Markets feared an immediate upheaval, but the deferral brought relief,” said Filiz Eryılmaz, chief economist at ALB Yatırım. “A rate cut was already expected in July. Now that political risks are temporarily subdued, there’s a clearer path.”
Rate Cut Speculation Builds
Analysts now fully price in a 350 basis point rate cut in July, buoyed by expectations that June inflation will come in lower than forecast.
“The market is now focusing on macro fundamentals rather than political landmines,” said Mustafa Kemal Eski of Marbaş Menkul Değerler, echoing the view that Monday’s rally was politically driven.
The Turkish lira was last seen trading at 39.765 per dollar, slightly firmer than Friday’s close of 39.88. Meanwhile, investors continue to watch the unfolding CHP case, now postponed until early September — a delay that may only be a temporary reprieve.
Please note that the market information is current as of noon hours Turkey Time.
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