Catenaa, Monday, March 24, 2025– Turkey Capital Market Board banned short selling across all stocks on Sunday to prevent further equity losses in the country’s main index amidst political turmoil.
The new rules broaden a previous ban that limited short-selling to only the top-50 listed companies. In addition, the regulator has allowed listed companies to repurchase shares at prices above the last market close and reduced the minimum equity capital protection requirement for margin trading to 20% from 35%.
The moves come in the wake of the arrest of Istanbul Mayor Ekrem Imamoglu, a rival to President Recep Tayyip Erdogan. Imamoglu’s detention on Wednesday sparked a market rout, sending the Turkish lira to an all-time low and driving bond yields higher.
The banking stocks index posted its steepest weekly drop since at least 2001. In response, the central bank raised a key interest rate in an unscheduled meeting Thursday.
The measures will be effective from March 24, 2025, until the close of trading on April 25, 2025.
These steps aim to “ensure the functioning and development of the capital market in a reliable, transparent, effective, stable, fair and competitive environment and to protect the rights and interests of investors,” Turkey’s capital market regulator said.
Bloomberg’s indicative pricing showed the Turkish lira quoted around the 38 per dollar level in Asian trading Monday.The currency closed at 37.73 per dollar on Friday.
Turkish central bank officials held a “technical meeting” with commercial lenders on Sunday to prepare for potential market volatility, according to a statement from the Turkish Banks Association.
The central bank also said it will hold a liquidity bill auction with 91-day maturity, the first such action in nearly two decades, aimed at absorbing excess lira.
