ISTANBUL, Sept. 17 (Xinhua) -- Turkish financial authorities reassured investors on Thursday that there is no fundamental or structural risk to the country's stock market following a sharp sell-off, pledging swift measures to ease a liquidity squeeze concentrated in part of the fund market.
The Financial Stability Committee, chaired by Treasury and Finance Minister Mehmet Simsek, convened early Thursday to assess developments in the capital markets after the benchmark BIST 100 index plunged more than 7.5 percent at one point on Wednesday.
In a post-meeting statement, the Ministry of Treasury and Finance said recent volatility stemmed from credit and liquidity problems at some funds managed by a limited number of portfolio management companies.
"There is no fundamental or structural risk concerning the functioning of Borsa Istanbul and our capital markets. The problem is concentrated in a specific segment of the fund market and is temporary and manageable," the ministry said.
The committee also discussed measures to ease liquidity pressures and prevent contagion risks while maintaining financial market stability, adding that regulatory and supervisory bodies would continue to act decisively against those engaged in market-disruptive activities, the statement said.
The online economy news platform Ekonomim attributed the sharp market downturn primarily to liquidity shortages at mutual funds following regulatory changes introduced by the Capital Markets Board on Aug. 28, which prompted increased redemption requests and added to liquidity pressures in the market.
According to Borsa Istanbul data, heavy selling on Wednesday triggered an index-based circuit breaker in the afternoon, with the BIST 100 ultimately closing 5.54 percent lower at 13,122.58 points. ■
