Turkiye detained Istanbul mayor Ekrem Imamoglu, the main rival of President Tayyip Erdogan, on charges of corruption and aiding a terrorist group in what the main opposition party on Wednesday called “a coup against our next president”.

The move against the popular two-term mayor caps a months-long legal crackdown on opposition figures across the country which has been criticised as a politicised attempt to hurt their electoral prospects and silence dissent.

Turkiye’s lira currency crashed as much as 12% to an all-time low of 42 to the dollar in response, underscoring worries over the eroding rule of law in the major emerging market and NATO member.

Imamoglu, 54, who leads Erdogan in some opinion polls, was to be named his Republican People’s Party’s (CHP) official presidential candidate within days. He now faces two separate investigations that also include charges of leading a crime organisation, bribery and tender rigging.

In a handwritten letter shared on social media, the detained mayor said Turks would respond to the “lies, plots and traps” against him. Earlier, before leaving home for the police station, he said he would not give up in the face of pressure.

Justice Minister Yilmaz Tunc warned against linking Erdogan to Imamoglu’s detention or other legal processes, using words like “coup” to describe it, and also against street protests.

Though authorities temporarily banned protests and police shut down some city streets, hundreds of people gathered at the police station and chanted: “The day will come when (Erdogan’s) AK Party is called to account”.

Any larger protests could test authorities’ willingness to expand a legal blitz since late last year that already includes numerous indictments, the ousting of several elected opposition mayors and the jailing of a nationalist party leader.

Election

CHP leader Ozgur Ozel said his party would go ahead and select Imamoglu as presidential candidate on Sunday irrespective. “Turkiye is going through a coup against the next President. We are facing a coup attempt here,” he said.

The next election is set for 2028 but Erdogan has reached his two-term limit as president after having earlier served as prime minister. If he wishes to run again he must call an early election or change the constitution.

Erdogan, 71, faced his worst electoral defeat in nationwide municipal elections last year when Imamoglu’s CHP swept Turkiye’s major cities and defeated his ruling AK Party in former strongholds.

“Ultimately, today’s developments highlight that no matter the cost, Erdogan’s personal agenda remains the top priority, with everything else taking a back seat,” said Wolfango Piccoli, co-president at advisory Teneo.

The government denies the opposition charges and says the judiciary is independent.

At the same time, Ankara is seeking to end a decades-long insurgency by the outlawed Kurdistan Workers Party (PKK) after its jailed leader called for disarmament last month, in what could be a big step towards regional peace.

Yet the mayor’s detention – in part over charges he aided the PKK by forming an electoral alliance with the pro-Kurdish DEM Party last year – could hamper democratic steps towards ending the insurgency in which more than 40,000 people have been killed.

DEM, parliament’s third largest party, which played a key role in facilitating the disarmament call, said Imamoglu must be released to avoid sabotaging the peace process.

Markets tumble

Germany, France and the Council of Europe criticised Imamoglu’s detention. Human Rights Watch called the charges “politically motivated and bogus”, and said he must be released immediately.

The Istanbul prosecutor’s office said a total of 100 people, including journalists and business people, were suspected of being involved in criminal activities related to certain tenders awarded by the municipality, as part of the first investigation.

It said a second probe charged Imamoglu and six others with aiding the PKK, which is deemed a terrorist organisation by Turkiye and its Western allies.

A government appointee could replace the mayor, who could be released in the coming days pending any court arrest.

The detention came a day after another blow to Imamoglu, who already faced numerous probes and indictments: Istanbul University annulled his degree, which if upheld would block him from running in presidential elections.

His detention sent Istanbul stocks down more than 5% and sparked one of the lira’s worst intraday plunges on record before it settled at 38 to the dollar at 1155 GMT. The shock could curb a rate-cutting cycle and slow a fall in inflation, which dipped to 39% last month, analysts said.

The central bank sold a record $8-10 billion of foreign currency on Wednesday to cushion the lira plunge, bankers said.