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(Bloomberg) — A Turkish court dropped a case that threatened to remove the leadership of the main opposition party, bringing relief to investors concerned about political unrest stemming from a crackdown against President Recep Tayyip Erdogan’s opponents.
The lira trimmed losses after weakening to a record low earlier in the day, while stocks rallied on the news.
The case had posed one the biggest risks for the opposition in the recent clampdown, threatening to oust the chairman of the Republican People’s Party Ozgur Ozel. The leader of CHP, how the party is known, was credited with reinvigorating the opposition after more than a decade of electoral losses under his predecessor Kemal Kilicdaroglu.
The decision to dismiss the case is likely to help support investor confidence, which began to sour due to the stream of legal cases and investigations. Political turbulence caused stocks and government lira bonds to sell off at different points this year, as was the case with a ruling placing the CHP’s influential Istanbul branch under a court-appointed trustee.
The benchmark Borsa Istanbul 100 stock index rose as much as 3.5%, while the lira was trading 0.2% lower at 41.9949 per the dollar at 11:12 a.m. in Istanbul.
Markets have been on edge since the March arrest of CHP’s Istanbul Mayor Ekrem Imamoglu — touted as Erdogan’s main rival for the presidency — on corruption charges that he’s denied and denounced as politically motivated.
Friday’s case, which sought to weigh accusations of irregularities during the CHP’s 2023 convention that elected Ozel as chairman, had added to mounting pressure on the opposition. Authorities have detained and suspended dozens of mayors, journalists and other prominent figures in a widening crackdown in recent months.
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