In a dramatic turn of events, Istanbul Mayor Ekrem Imamoglu, a prominent opposition figure and key rival to Turkish President Recep Tayyip Erdogan, was arrested on charges of corruption and alleged ties to terrorism.
The arrest, which came just days before Imamoglu was expected to be named the opposition's presidential candidate, sparked accusations of political interference.
Critics argue this is a calculated move by Erdogan's administration to stifle dissent and consolidate power ahead of 2028 elections.
The government, however, insists the judiciary operates independently, dismissing claims of a politically motivated crackdown.
The fallout from Imamoglu's arrest has shocked Turkey's financial markets.
The Istanbul Stock Exchange's main index plunged 7%, prompting a temporary trading halt to prevent panic selling.
The Turkish lira nosedived, losing over 10% of its value against the dollar before stabilising slightly.
Investors, spooked by the political instability, dumped Turkish assets, leading to a surge in government bond yields.
The ripple effects extended beyond Turkey, with emerging-market currencies and stocks also suffering.
Globally, the arrest has drawn sharp criticism, with Germany and France expressing concerns about Turkey's democracy.
Protests erupted across Istanbul despite a four-day demonstration ban, as Imamoglu supporters decried the move as a "coup" against the opposition.
Political turmoil has deepened divisions within Turkey and threatened its economic stability.
This has left both domestic and international investors wary of what lies ahead.
