Turkey Says $18.3 Billion Fund Liquidation Poses No Systemic Risk to Borsa Istanbul

Turkey's Finance Minister Mehmet Simsek has said the liquidation of investment funds worth $18.3 billion will not put pressure on Borsa Istanbul, pointing to regulatory changes that should prevent any contagion risk. Authorities will continue to monitor the market closely, he added.

The Capital Markets Board on Friday directed Isbank and Ziraat Bank to oversee the liquidation of 131 investment funds managed by seven portfolio companies.

Speaking in an interview with broadcaster NTV, Simsek sought to reassure investors that the situation was contained. "There is no widespread systemic risk. There is no structural problem in the stock market or the fund market. 90% of the fund market continued to function healthily," he said.

He added that authorities would keep watching the markets, though he noted that regulatory changes should have reduced the risk of volatility recurring.

The intervention followed a fund liquidity crunch that triggered steep falls in Turkey's main stock index this week. The authorities' actions helped the index recoup some losses on Thursday, but it remains down around 8% since last Friday's close.

The BIST-100 was down around 1.5% at 0754 GMT, after closing 2.95% higher the previous day. The index is set to record its worst weekly performance since March 2025, when opposition Istanbul Mayor Ekrem Imamoglu was jailed.

Simsek also said there was a clear need for stricter rules in the non-bank finance sector and that authorities are working on regulations.