**Turkish Lira Faces Significant Weekly Decline Amid Political Turmoil**

The Turkish lira is set to experience its largest weekly decline in nearly two years, primarily driven by the recent arrest of prominent opposition figure Ekrem Imamoglu, the Mayor of Istanbul. This political turmoil has raised concerns among investors, leading to a notable depreciation of the currency.

As of 11:02 a.m. in Istanbul on Friday, the lira traded 0.5% lower at 38 per dollar, marking a stark 3.7% decline over the last five days. This downturn represents the lira’s most significant depreciation since June 2023, signaling growing instability in the market.

The downward trajectory of the lira began on Wednesday when Imamoglu was taken into custody. His status as President Recep Tayyip Erdogan’s main challenger has intensified worries regarding political stability, prompting lenders to divest significantly, with sales reaching up to $9 billion. In a bid to bolster the currency, the Turkish central bank intervened with a surprise interest rate hike.

According to economists from Goldman Sachs Group Inc, the central bank’s decision is seen as a protective measure aimed at mitigating outflows from lira deposits as political uncertainties loom. This reflects the broader implications of political events on market sentiment and currency performance.

For forex traders, it is essential to monitor the ongoing political situation in Turkey, as instability could lead to further volatility in the lira. Traders should also be aware of potential central bank actions, as interest rate changes often have immediate effects on currency valuation.

In light of these developments, traders may consider adjusting their strategies, keeping an eye on news cycles surrounding Turkish politics and potential economic measures that could influence the lira’s trajectory. Understanding the interplay between political events and currency performance will be crucial in navigating the forex market in the coming days.