Turkey 10-Year Bond Yield Rises Over 1%

The yield on Turkey's 10-year government bond surged past 31%, its highest level since at least 2010, before easing slightly, as investors continued to pull away from Turkish assets amid escalating political turmoil. Istanbul’s mayor, Ekrem Imamoglu, one of Turkey’s most prominent politicians and President Erdogan’s chief rival, was formally arrested and sentenced to jail on corruption charges. His recent detention, coupled with the revocation of his university diploma, is expected to bar him from challenging Erdogan in the upcoming elections, triggering widespread protests and a sharp sell-off in Turkish markets. Imamoglu had been the frontrunner for the Republican People’s Party (CHP) presidential nomination, representing the main opposition. In response to the turmoil, Turkey’s central bank raised its key overnight lending rate by 200 basis points to 46% in an emergency move last week and has been engaging with top lenders in an effort to stabilize markets.

The yield on Turkey's 10-year government bond jumped more than 100bps to 27.6% on Wednesday, the highest level in nearly three months, as traders move away from Turkish assets amid political turmoil. Istanbul’s mayor, Ekrem Imamoglu, one of Turkey’s most popular politicians and President Erdogan’s main rival, was detained on allegations of fraud and terror, after authorities revoked his university diploma, a move that could bar him from running against Erdogan. Imamoglu was set to be named the presidential candidate for the Republican People’s Party, the main opposition group, on Sunday. At the start of the year, a more orthodox monetary policy supported the bond market, as slowing inflation and the central bank’s tight stance helped attract foreign investors.