Turkish stock market hits lowest since 2008 crisis
Turkey’s main stock index dropped to the lowest level in dollar terms since the global financial crisis in 2008 after a sell-off in the lira and concerns about economic stability persisted.
The BIST-100 index fell 1.5 percent to 96,360 points in Istanbul trading on Wednesday, below a key psychological level of 100,000 points. Food and metals stocks led the declines.
Turkey’s stock index has fallen along with the lira this year amid a sell-off in emerging markets and after ratings agencies and the International Monetary Fund warned that government stimulus measures were overheating the economy.
Inflation in the country surged to 12.2 percent in May from 10.9 percent the previous month, the State Statistical Institute reported on Monday, in a further sign that monetary and economic policy is failing to stabilize price increases and cool the economy down.
Turkey’s central bank is due to meet on Thursday to decide on interest rates. Turkish ministers on Wednesday signaled that further rate increases aren’t in the pipeline after a 300 basis-point hike to 16.5 percent last month. Deputy Prime Minister Mehmet Simsek said meetings with investors in London last week did not include a definite pledge to raise rates.
Turkey’s government is facing presidential and parliamentary elections on June 24. The snap polls have been called by President Recep Tayyip Erdogan, who cited economic factors and the war in neighbouring Syria for the decision.