Turkey's capital markets regulator has implemented a ban on short-selling for all stocks and eased restrictions on share buybacks to stabilize the market after a 17% decline in the benchmark index following the detention of a prominent opposition leader. The new regulations go beyond the previous restriction on short-selling limited to the top 50 listed companies. Furthermore, listed companies are now permitted to repurchase shares at prices above the last market close, and the minimum equity capital protection requirement for margin trading has been reduced to 20% from 35%.

The market turmoil was triggered by the arrest of Istanbul Mayor Ekrem Imamoglu, a significant rival to President Recep Tayyip Erdogan. This event led to a drastic drop in the Turkish lira value against the dollar and increased bond yields, with the banking stocks index experiencing its most substantial weekly decline since at least 2001. In response, the central bank unexpectedly raised a key interest rate while keeping its benchmark rate unchanged.

In anticipation of a volatile trading session on Monday following Imamoglu's arrest, the central bank engaged in discussions with top banking executives on Sunday. The Turkish lira was quoted at 37.95 per dollar in early Asia trading. The regulatory measures will be effective until the market closes on April 25.