Turkish Economy Minister Zafer Caglayan and Interior Minister Muammer Guler have resigned amid a corruption probe that has turned into a battle between the government on one side, and Turkey's judiciary and police on the other.
The ministers resigned after their sons were among 24 people arrested following accusations of bribery, money laundering and gold smuggling.
The affair has hurt investor confidence and driven down share prices, although BlackRock (BLK) views the situation as an opportunity. "We have been adding to positions in Turkey...as valuations are now compelling," says BlackRock's Sam Vecht. As it happens, BlackRock is the top private shareholder in two companies whose CEOs have been detained: state-owned lender Turkiye Halk Bankasi (THBIF) and real-estate developer Emlak Konut Gayrimenkul Yatirim Ortakligi (EKKGF).
The ISE 100 stock index is -2.4%, while the USD-TRY is -0.1% at 2.077 Turkish lira.
Update: The environment minister has also stepped down and called for Prime Minister Tayyip Erdogan to follow suit.