Turkish Court Annuls 2023 Opposition Party Congress Results

The decision voids the election of the current party chairman and reinstates the previous party administration. The ruling also cancels all decisions made by the party since the 2023 congress. The party can appeal the decision. Turkish stocks fell after the court ruling.

The benchmark Borsa Istanbul 100 Index closed 6.1% lower, triggering a market-wide circuit breaker. Five-year credit default swaps rose 12 basis points to 253 basis points.

The lira traded at 45.6133 per U.S. dollar with little change as of 6:09 p.m. Istanbul time. Officials had sold nearly all of Turkey's U.S. Treasuries in March to defend the currency after the Iran war began. A Van Eck Associates Corporation portfolio manager said the central bank still has enough reserves to maintain its current policy framework, though the buffer is wearing thin.

The decision reinstates the previous party leader, who lost the 2023 presidential election. The ruling may affect the party's efforts to secure the release of a jailed Istanbul mayor who is the party's presidential candidate for elections scheduled for 2028.

Hundreds of party figures have been detained since the 2024 elections. Opposition figures have said such charges are politically motivated. A Generali Asset Management strategist said the decision will dent risk appetite for Turkish lira carry trades and that Turkey is in a trickier position than before.