Investors were concerned over the possible impact of rapid loan growth after a central bank decision to lower required reserves limits and boost returns for lenders with more than 10% loan growth. "The mode and perspective for the Turkish market changed after the central bank's move on required reserves," an FX trader at one bank told Reuters.
The Turkish currency has lost some 8% of its value against the US dollar so far this year, on top of a currency crisis which wiped around 30% off the lira's dollar value in 2018, tipping the economy into recession. Concerns about developments in Syria also weighed on market sentiment after Ankara said on Monday an air strike on a Turkish military convoy in northwest Syria killed three civilians. The main BIST 100 stock index was trading 0.77% lower while the banking index was some 1% weaker.