According to sources familiar with the situation, Turkish central bank officials are set to meet with commercial lenders on Sunday to address recent market turbulence caused by the arrest of a prominent opposition figure.

During the meeting, officials will explore potential collaboration with banks and assess the recent downturn in Turkish markets. The gathering, kept confidential, is a significant engagement between the country's financial institutions and the central bank following the arrest of Istanbul's mayor, Ekrem Imamoglu, which led to market upheaval.

The lira, Turkish stocks, and debt experienced substantial drops in response to concerns about a shift in Turkey's economic policies brought about by Imamoglu's detention. Finance Minister Mehmet Simsek reassured banks in a recent meeting that policymakers will utilize all available measures to counter what he described as a temporary market instability.

Imamoglu, a key contender against President Recep Tayyip Erdogan, was imprisoned on corruption allegations. In response to market uncertainties, the central bank implemented measures to bolster the lira, including raising the overnight lending rate and suspending lending at the benchmark rate for an unspecified duration.

Furthermore, the central bank announced plans for a liquidity bill auction with a 91-day maturity, marking its first such action in nearly twenty years to absorb excessive lira supply. Consequently, the overnight reference rate for the lira increased to 45.7% following these interventions.