(Bloomberg) — A Turkish court dismissed a case that threatened to oust the leadership of the main opposition party, relieving investors worried about political unrest stemming from a crackdown on President Recep Tayyip Erdogan’s opponents.
The lira pared losses after weakening to a record low earlier in the day, while shares rose on the news.
The case posed the biggest risk to the opposition in the recent crackdown, threatening to oust Republican People’s Party Chairman Ozgur Özel. The leader of the CHP, as the party is known, was credited with reinvigorating the opposition after more than a decade of electoral defeats under his predecessor Kemal Kilicdaroglu.
The decision to dismiss the case is likely to help support investor confidence, which had begun to deteriorate due to the stream of legal cases and investigations. Political turmoil has led to sales of stocks and government lira bonds at various points this year, as was the case with the decision to place 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 dollar at 11:12 a.m. in Istanbul.
The market has rallied since the arrest in March of CHP Istanbul Mayor Ekrem Imamoglu – considered Erdogan’s main rival for the presidency – on corruption charges, which he denies and says is politically motivated.
Friday’s case, which sought to weigh allegations of irregularities during the CHP’s 2023 convention that elected Özel as president, had increased pressure on the opposition. Authorities have detained and suspended dozens of mayors, journalists and other prominent figures in a sweeping crackdown in recent months.
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