I used to cover Turkish politics, monetary policy and the lira as a matter of course, and some readers wondered why.

Turkey’s a large emerging market, a NATO member and Ankara’s a key regional power broker, so I had plenty of excuses, but to be completely honest, I covered Turkey mostly because Recep Tayyip Erdogan’s a source of grim amusement.

On the autocrat-dictator continuum, Erdogan falls somewhere between Viktor Orban and Vladimir Putin. Turkey’s an example of so-called “competitive authoritarianism,” which Steven Levitsky described more than two decades ago as a state where “formal democratic institutions are widely viewed as the principal means of obtaining and exercising political authority [but] incumbents violate those rules so often and to such an extent, that the regime fails to meet conventional minimum standards for democracy.”

At the time, Levitsky cited Putin’s Russia as an example, and that might’ve been more or less accurate back then. In the near quarter century since, Putin’s morphed into a full-on dictator and there’s nothing “competitive” about Russia’s elections: No serious competitors are allowed to live, let alone contest power.

Orban’s Hungary isn’t Putin’s Russia which, as noted, doesn’t even maintain the trappings of a democracy anymore. But Hungary under Orban isn’t a democracy either. As Levitsky would put it, the political playing field’s hopelessly uneven in Hungary such that Orban rules as an autocrat, but not as a dictator and certainly not as an iron-fisted tyrant, even if his critics and opponents would doubtlessly describe him as tyrannical.

Erdogan’s more of a strongman than Orban. In person, Orban’s obsequious to real strongmen, particularly Putin. Erdogan’s not obsequious to anyone, Putin included. If you want to get an idea about the dynamic between the two men, there’s a famous video from July of 2022 which captures the moment Erdogan leaves Putin waiting for nearly a full minute in a room full of reporters. Putin’s visibly uncomfortable and plainly aggrieved at the slight, which was, of course, purposeful.

It’s not that Erdogan doesn’t like Putin — the relationship between Ankara and Moscow is cordial when it needs to be and adversarial only when it has to be. It’s just that, as a dangerous person himself, Erdogan knows it’s important to set the tone when you’re dealing with dangerous people. In short, Erdogan views himself as a neo-sultan in the same way Putin views himself as a new tsar. And you’re not going to back-foot, let alone back-hand, the sultan. If you give Erdogan an opening, he’ll hold your feet to the fire until your toes are charred, just ask Mohamed Bin Salman, who got outmaneuvered by Erdogan during the Jamal Khashoggi debacle.

That to say this: Erdogan’s a real strongman. The genuine article. But in terms of domestic politics and the way he governs, his methodology’s more akin to Orban in Hungary than Putin in Russia. The political playing field’s not level at all in Turkey, and it’s no one’s idea of a perfect democracy. But, to quote Levitsky again, democratic institutions, compromised as they are in Turkey, are still “the principal means of obtaining political authority.” Elections in Turkey aren’t a sham. They may be shambolic on some vectors and interpretations, but they aren’t fake. AKP can, and occasionally does, lose. In theory anyway, Erdogan himself could lose power.

It’s with all that in mind that Erdogan on Wednesday had Ekrem Imamoglu arrested. That probably doesn’t mean much to most of you, but it’s a big deal. Imamoglu’s Istanbul’s mayor, and there’s a history here. In 2019, when Imamoglu won the mayorship, Erdogan accused dozens of polling station officials of having links to his archenemy, Pennsylvania-based Fethullah Gulen, who died last year. Those accusations were a pretext for a high election board ruling which ultimately forced Imamoglu to win the office twice. Erdogan finally conceded that AKP’s candidate lost in the do-over election, held a month later. It was the first time in a quarter century that a non-AKP politician held the office.

Imamoglu won another term as Istanbul mayor in 2024, and… well, look, do I really need to spell this out for you? He’s popular, he’s an opposition figure and he has designs on ousting a modern day sultan. And so it was that a gang of police officers showed up at his house Wednesday and took him away on nebulous charges of corruption and terrorism. Erdogan also issued warrants for dozens of other people, presumably all connected to CHP, the main opposition party.

If you know anything about Erdogan, you can write the charges against Imamoglu without even reading the statement from the local prosecutor. He’s corrupt, allegedly, and you can tell because he used the mayor’s office to line his own pockets through bribery, bid-rigging and money laundering. If that sounds like Erdogan’s accused Imamoglu of being a mobster, that’s because he did just that: Imamoglu’s the “leader of a criminal organization,” the prosecutor’s office said.

In case that wasn’t enough, Imamoglu also faces terrorism charges and those of you who follow Turkish politics doubtlessly know why: As was the case in the 2019 municipal elections, he sought to marshal the Kurdish vote against AKP in 2024. Erdogan views the Kurds as a national security threat — if you’re Erdogan, anything that isn’t Fethullah Gulen’s fault is the Kurds’ fault, including lost elections in Istanbul.

Needless to say, Turkish assets hated the idea of Erdogan arresting the only man who might contest the presidency, because that means Erdogan’s venturing further down the above-mentioned autocrat-dictator continuum. Turkish stocks plunged more than 8%.

As the figure shows, Wednesday was on track to be the worst session in four years.

The lira took it on the chin, and by that I mean the currency at one juncture weakened nearly 12% (and no, that’s not a typo or any sort of misprint) to a new record low.

I suppose I don’t have to say this, but a double-digit, one-day decline for a currency (any currency) counts as a veritable disaster. The chart below shows the worst levels of the day for the lira.

As of this writing, USDTRY was ~4% stronger (lira 4% weaker). CBT intervened, through state lenders, to the tune of $8 billion, which helped stanch the bleeding.

So, here we go again: Erdogan’s flirting with a currency crisis because he can’t keep his dictatorial predilections in check.

Imamoglu called his arrest “immoral and tyrannical.” He also insisted that Erdogan will be rebuked by the “the will and resilience of our people.”

Earlier this week, Erdogan revoked Imamoglu’s college diploma, a move which could ultimately make him ineligible for the next presidential election.

And this, America, is why autocracies are frowned upon.