Warning on the Turkish economy from renowned economist Steve Hanke: 'Big trouble is on the horizon'

12punto FOREIGN NEWS

Steve Hanke, a Professor of Applied Economics at Johns Hopkins University, has shared his views on the one-month ban on short-selling transactions at Borsa Istanbul. In a post on the X platform, Hanke issued a warning regarding the Turkish economy, stating that 'big trouble' is on the horizon.

The Capital Markets Board (SPK) decided on March 24 to ban short-selling transactions on Borsa Istanbul for a period of one month. The same decision also provided for the facilitation of share buybacks by publicly traded companies.

Commenting on the SPK's decision via his X account, Hanke stated the following:

''Turkey has banned short selling on the Istanbul Stock Exchange for one month. When short selling is banned, you know big trouble is on the horizon.''

WHAT DOES THE SHORT-SELLING BAN MEAN?

Short selling covers transactions carried out by investors in the expectation that a stock will lose value. In this method, investors aim to sell borrowed shares and buy them back later at a lower price. While a profit is made when a price drop occurs, a loss is incurred in the event of a rise.

Market regulators can temporarily halt short selling when extraordinary fluctuations occur. Such measures are taken to prevent extreme volatility and protect investor confidence.

In its statement, the SPK said, 'Due to recent developments in Borsa Istanbul AŞ markets, it has become necessary to take certain measures.' It was noted that within the scope of the decision, short-selling transactions would be halted between March 24 and April 25.

The Board stated that it conducts continuous audits to ensure the transparent and stable functioning of the market. It was emphasized that the measures taken are aimed at protecting investor rights.

News Source: 12punto