Which 2001 Turkish financial crisis followed a dispute between President Ahmet Necdet Sezer and Prime Minister Bülent Ecevit?

The 2001 Turkish financial crisis followed a political dispute between President Ahmet Necdet Sezer and Prime Minister Bülent Ecevit.

On February 19, 2001, the public confrontation at a National Security Council meeting intensified concerns about Turkey’s political stability and economic program. Investors withdrew funds, interest rates surged, and the country’s crawling-peg exchange-rate system came under overwhelming pressure.

Turkey abandoned the peg and allowed the lira to float. The currency depreciated sharply, banks and companies suffered, and the Istanbul Stock Exchange fell heavily. The crisis followed earlier banking and fiscal weaknesses, including large public-sector borrowing requirements and fragile financial institutions, so the political dispute acted as a trigger rather than the sole underlying cause.

The government implemented a reform program supported by the International Monetary Fund. Banking-sector restructuring and later macroeconomic stabilization helped Turkey recover, although the immediate crisis caused a deep recession and major loss of income.