An analytical briefing for foreign entrepreneurs, investors and companies that operate in Türkiye or are considering entering the Turkish market.

On 14 October, Istanbul was hit by torrential rain: flooded streets, stranded cars, closed schools and a ban on motorcycles, which means couriers too. For any company with warehouses, offices, shops or deliveries in Istanbul, this is a reminder that weather risk in the megacity is now part of business planning.

Mid-October 2026 presents a mixed picture for business in Türkiye. On one side, the financial market is still absorbing the so-called “fund crisis” (fon krizi): the regulator has shut down 131 investment funds, and parliament is fast-tracking a special law on how to return money to nearly 456,000 investors. The BIST 100 index has lost almost 15% in a month, and daily turnover remains below TRY 100 billion.

On the other side, the macroeconomy is cooling: annual inflation has slipped below 30%, the central bank is holding its policy rate at 37%, and large Turkish banks and corporates keep securing long-term foreign funding and signing multi-year contracts. VakıfBank has raised a 10-year loan backed by Italy’s export credit agency, and Turkish Airlines has locked in the largest narrow-body Boeing order in its history.

No single event tells the whole story of the economy. A falling stock market does not mean a crisis in the real sector, the fund bill is not yet law, and one large loan does not mean capital markets are open to everyone. Below we go through the main themes one by one: what happened, why it matters and what companies should do.

Key takeaways

• The 14 October downpour paralysed parts of Istanbul: schools are closed on 15 October, and motorcycles and other two-wheelers are banned from traffic until further notice.
• Parliament’s Plan and Budget Committee approved a 9-article bill on liquidating investment funds: interim payouts of up to TRY 1 million per investor, recovery of diverted assets and collection of losses from those responsible. It is not yet law.
• The BIST 100 closed 14 October at 12,118 points (−1.08%); it is down 14.87% over the month but still up 7.61% year to date.
• September inflation: 1.84% month on month and 29.73% year on year. The central bank’s policy rate is 37%; the next decision is due on 22 October.
• VakıfBank secured EUR 200 million for 10 years from ING Germany under a 95% guarantee from Italy’s SACE; the bank’s foreign funding in 2026 has reached USD 9 billion.

1. Istanbul floods: weather risk as part of business planning

What happened

On 14 October 2026, heavy rain flooded many Istanbul districts, cars were stranded on several roads and traffic ground to a halt. The governor’s office reported 47 cases where people had to be rescued from flooded areas. Beykoz-Ömerli recorded 193.84 kg of rainfall per square metre. According to the newsletter, two people died.

The Istanbul Governor’s Office took emergency measures:

• In-person classes at all public and private educational institutions in the city were suspended for one day on 15 October.
• From 21:00 on 14 October and until further notice, motorcycles and other two-wheelers are banned from traffic.
• A heavy-rain warning remains in place for 15 October, especially on the Asian side, with a risk of flooding and transport disruption.

Forecasters also expect heavy rain in the Marmara region and western Aegean, and very heavy rain around Antalya and Muğla.

Why it matters for foreign business

The two-wheeler ban hits food delivery, courier services and online retail immediately: much of Istanbul’s last-mile delivery runs on motorcycle couriers. School closures mean some employees with children cannot come to the office. Flooding creates risks for ground-floor warehouses, retail outlets and vehicle fleets.

There is a financial angle too. On the day of the storm, the XSGRT insurance index was the best-performing sector on the exchange. This coincidence should not be read as a direct link, but weather losses and demand for property cover are becoming an increasingly visible theme for the insurance market.

What companies should do

• Check whether your property and inventory insurance covers flood and water damage, and what the exclusions are.
• Have a business continuity plan: remote work, alternative delivery routes, arrangements with courier companies in case of bans.
• When choosing a warehouse, office or commercial property, consider the area’s flood history and the floor on which goods are stored.
• Warn customers about possible delivery delays on days with weather restrictions.

2. Fund liquidation: what the new bill changes

What happened

On 14 October, the Plan and Budget Committee of the Grand National Assembly of Türkiye (TBMM) approved the bill “On Certain Investment Funds Ordered into Liquidation” (Tasfiyesine Karar Verilen Bazı Yatırım Fonları Hakkında Kanun Teklifi). The 9-article bill was drafted by the ruling party and submitted on 9 October. The next step is a vote in the General Assembly.

The bill sets rules for three things: interim payments to investors of up to TRY 1 million, recovery of assets unlawfully taken out of the funds, and collection of losses from the assets of those responsible. Confiscated assets may be returned directly to the funds. The liquidation is supervised by the Capital Markets Board (SPK), which will set valuation methods, the payment schedule and the order of distribution. The authorities stress that no Treasury money will be used for compensation.

How the “fund crisis” started

On 17 September 2026, SPK ordered the liquidation of 131 funds run by seven portfolio management companies (portföy yönetim şirketi, PYŞ) and halted trading of their units on the TEFAS platform. According to the regulator, the funds had 455,758 unique investors. The trigger was a series of Istanbul prosecutors’ investigations into market manipulation: according to investigators, prices of thinly traded shares were artificially inflated through certain hedge funds (serbest fon) and money market funds. The liquidation period was later extended from three to six months.

Some payouts are already under way. According to the Presidency’s communications office, state-owned Ziraat Bank has paid TRY 6.4 billion to 43,643 investors in funds of three management companies. Once this stage is complete, 66 funds, around 45,700 people and TRY 40.5 billion will have been settled, partly in kind rather than in cash. Interim payments for the remaining 65 funds depend on the new law.

How the interim payout will be calculated

The basis is the “net investment amount” (net yatırım tutarı): what an investor actually put in minus what they took out. According to the bill as described, the first payout is not inflation-indexed.

Oversight: investigation into a former SPK chairman

Treasury and Finance Minister Mehmet Şimşek has authorised Istanbul prosecutors to investigate former SPK chairman İbrahim Ömer Gönül for alleged abuse of office. Prosecutors argue that under his leadership the regulator failed in its duty to supervise the funds. Gönül left the post in May 2026. Authorising an investigation is not a finding of guilt.

Why it matters for foreign business

Türkiye’s collective investment market has grown very quickly in recent years: money market funds and hedge funds offered returns above bank deposits, attracting not only retail savers but also companies parking spare lira liquidity. The crisis showed that the outsized returns of some managers may have been linked to manipulation, and that supervision did not keep pace with growth.

For a foreign company this is first of all a treasury issue. If your Turkish subsidiary holds cash in funds, you need to know exactly which manager and which fund. Stricter rules for the whole industry are likely, and banks and auditors can be expected to look harder at clients’ fund placements.

What companies should do

• Check where your Turkish entity’s spare liquidity sits: deposits, bonds, or units of which funds and which managers.
• If the company or its employees invested in the closed funds, gather records of every subscription and redemption: the payout depends on them.
• Review treasury policy: limits per manager, liquidity requirements, a ban on high-risk products.

What investors should watch

The final text of the law may differ from the committee version. The timeline for the remaining 65 funds will only be set after the law passes, and it will depend on the investigations and on asset values. The crisis affects a limited group of managers and does not mean all Turkish funds are in trouble, but confidence in the sector will take time to recover.

3. Equities: BIST 100 down almost 15% in a month

What happened

On 14 October, the BIST 100 closed at 12,118 points, down 1.08%, on turnover of TRY 86.1 billion. The index tried to climb towards 12,250 around midday, but selling pushed it back to the session low. It is almost flat for the week (−0.04%), down 14.87% for the month and up 7.61% year to date.

The day’s best performers were insurers and energy: Anadolu Hayat Emeklilik (+1.86%), Türkiye Sigorta (+1.66%) and Akfen Yenilenebilir Enerji (+1.58%).

Why it matters for foreign business

The monthly drop of almost 15% coincides with the fund crisis: the closed funds held large stakes in illiquid stocks, and the market is pricing in the risk that these will be sold during liquidation. Low turnover suggests retail investors have stepped back. For companies counting on an IPO or capital raising on Borsa Istanbul, the window is less favourable right now.

Falling share prices do not mean the issuers’ businesses have deteriorated. For strategic investors looking at stakes in Turkish listed companies, lower valuations may create opportunities, adjusted for volatility and currency risk.

What companies should do

• If a listing was planned for the coming months, prepare a fallback timetable and alternative sources of funding.
• When valuing Turkish assets, look at liquidity and free float (fiili dolaşım oranı): illiquid stocks were at the centre of the investigations.

What investors should watch

The key question for the coming weeks is how the liquidated funds’ assets will be sold. If SPK opts for a gradual sale, pressure on individual stocks will be smaller. This is a scenario, not a forecast.

4. Inflation and interest rates: where the Turkish economy stands

What happened

According to the Turkish Statistical Institute (TÜİK), consumer prices rose 1.84% in September 2026 month on month and 29.73% year on year. In August, annual inflation was 31.51%, so it has now dropped below 30%. Economists had expected a higher monthly figure of around 2.2%.

On 10 September, the Central Bank of the Republic of Türkiye (TCMB) kept its policy rate, the one-week repo rate, at 37%. The next monetary policy meeting is on 22 October, followed by 10 December.

Another indicator is agricultural producer prices (Tarım-ÜFE). According to the newsletter, they fell 1.99% in September month on month and rose 12.93% year on year; the steepest falls were in fish and seafood (−9.93%) and perennial crops (−8.37%).

Why it matters for foreign business

Inflation dipping below 30% is an important psychological threshold: it shapes rate expectations, the cost of lira loans and contract indexation. Many lease and service contracts in Türkiye are linked to TÜİK indices, and the legal cap on residential rent increases is based on 12-month average inflation.

Slower growth in farm-gate prices is good news for food producers, retail and hospitality, as pressure on purchase prices eases. But it is one data point, not a trend.

What companies should do

• Rebuild the 2027 budget with several inflation and exchange-rate scenarios instead of a single number.
• Check indexation clauses in lease and supply contracts: which index and how often.
• Before the 22 October decision, avoid locking in long-term lira loan rates without modelling the alternatives.

5. Funding: VakıfBank and an Italian export credit

What happened

On 13 October, state-owned VakıfBank disclosed on the KAP public disclosure platform that it had received EUR 200 million for 10 years from ING Germany, 95% guaranteed by SACE, Italy’s state export credit agency. The funds will finance clients trading with Italy. According to the bank’s management, VakıfBank has raised USD 9 billion from abroad since the start of 2026. The cost of the loan was not disclosed.

Why it matters for foreign business

Deals like this show that European export credit agencies keep insuring Türkiye risk over long tenors. For Turkish importers of Italian equipment and goods, it means access to long-term euro funding through a local bank; for Italian and other European suppliers, it means customers who can pay.

ECA-backed financing is not limited to Italy: Germany, France, Spain and others run similar programmes. For foreign equipment suppliers, it is one of the most accessible ways to sell into Türkiye on deferred payment terms.

What companies should do

• European exporters: discuss financing with Turkish buyers through local banks under your national export credit agency’s guarantee.
• Turkish subsidiaries of foreign groups: ask your banks whether they have open ECA lines for equipment imports.

What investors should watch

One loan does not mean foreign funding has become cheap for everyone. Large banks, especially state-owned ones, access it more easily than mid-sized businesses.

6. Aviation and logistics: the Turkish Airlines–Boeing order

What happened

Boeing reported that it delivered 57 aircraft in September 2026 and booked 165 new orders, helped by Turkish Airlines (THY). THY finalised its order on 23 September: 100 firm orders for the Boeing 737-8 plus options for 50 more 737 MAX aircraft, with the right to switch to the 737-10. It is the largest narrow-body order in the history of THY’s relationship with Boeing. According to the disclosure, deliveries are planned for 2033–2037. In 2025, THY ordered 75 wide-body 787 Dreamliners.

Why it matters for foreign business

THY is building one of the world’s largest transit hubs in Istanbul. Long-term fleet growth means more routes and flights, and therefore more passenger and cargo capacity. For exporters and logistics companies, this strengthens the case for Istanbul as a consolidation point between Europe, Asia, the Middle East and Africa. For tourism and business travel, it means better connectivity.

Large aircraft orders usually support a local supply chain: maintenance, training, component manufacturing. No specific localisation commitments under this order have been made public.

What companies should do

• Logistics and e-commerce companies: factor Istanbul’s growing air connectivity into long-term plans.
• Aviation service and component suppliers: follow THY tenders and industrial cooperation programmes.

7. Labour market: where skills are in short supply

What happened

A new OECD study of 38 countries, including Türkiye, found persistent worker shortages in some sectors and surpluses in others. The biggest gaps are for skilled staff in healthcare, education, technology and engineering. Demand for critical thinking, communication and problem-solving keeps growing. Across the OECD, surpluses were found among food preparation assistants and in some sales and service occupations.

Why it matters for foreign business

Türkiye is often seen as a market with a large pool of young workers. That holds for mass-market roles, but competition for engineers and IT specialists is intense and salary expectations are rising faster than average inflation. Companies setting up manufacturing, R&D or service centres in Türkiye should budget accordingly.

What companies should do

• Plan engineering and developer hiring early, and work with universities and internship programmes.
• Consider hybrid teams for some roles: part of the specialists in Türkiye, part remote.

8. External factors that will affect Türkiye

Two foreign developments this week have a direct bearing on the Turkish economy.

US inflation. US consumer prices rose 0.6% in September month on month and 3.7% year on year, above expectations, driven mainly by energy. Higher US inflation reduces the chances of quick Fed easing. For emerging markets, including Türkiye, this usually means a stronger dollar and more cautious portfolio investors.

Russian diesel. According to Deputy Prime Minister Alexander Novak, Russia has resumed diesel exports following an agreement with the US; the US Treasury has eased sanctions on Russian diesel until 7 April 2027. Türkiye is one of the major importers of Russian fuel. Any effect on fuel prices and logistics is still a scenario: it depends on volumes and routes.

What foreign companies should review

• Treasury: where your Turkish entity’s spare cash sits and how diversified it is.
• Funding: whether ECA lines and long-term euro loans are available through Turkish banks.
• 2027 budget: inflation, interest-rate and FX scenarios after the 22 October rate decision.
• Contracts: price and rent indexation clauses.
• Operational risk: flood cover and a continuity plan for weather restrictions in Istanbul.
• People: a realistic budget for engineering and IT roles given skills shortages.

Conclusion

October 2026 shows Türkiye in transition. The financial market is dealing with the fallout of the fund crisis, and how the new law is passed and applied will shape retail investors’ trust in funds and the stock exchange. At the same time, inflation is slowing, and large banks and corporates continue to raise long-term money and sign multi-year contracts.

For foreign businesses, the main lesson is to separate financial risks from operational ones. Market volatility and regulatory restructuring in the fund sector call for careful treasury management, but they do not necessarily change decisions about operating in the real economy. And the Istanbul floods are a reminder that in the country’s largest city, businesses need a weather plan B as well as a financial one.

Frequently asked questions

What is the 2026 “fund crisis” in Türkiye?

On 17 September 2026, the Capital Markets Board (SPK) halted trading and ordered the liquidation of 131 funds run by seven portfolio management companies amid investigations into share price manipulation. The funds had about 456,000 investors.

How much will investors in the closed funds receive?

Under the bill approved by the committee on 14 October, the interim payout is up to TRY 1 million: investors with a smaller net investment get the full amount back, others receive up to TRY 1 million in the first stage. Parliament still has to pass the law.

What are Türkiye’s inflation rate and policy rate in October 2026?

Annual inflation for September 2026 is 29.73%, and the central bank’s policy rate is 37%. The next rate decision is expected on 22 October 2026.

How do the Istanbul floods affect business?

Schools are closed on 15 October, and motorcycles and courier two-wheelers are banned from traffic until further notice. This affects deliveries, online retail and office attendance, and ground-floor warehouses and shops face flood risk.

Is now a good time for an IPO in Türkiye?

The window is less favourable: the BIST 100 has lost almost 15% in a month and turnover is low. The decision depends on the company and should be discussed with advisers, with a fallback timetable in place.

Sources

• Aposto Gündem, morning newsletter of 15 October 2026
• TBMM — bill 2/3939
• Borsa Gündem — fifth Fund Board meeting and investor payouts
• soL — SPK data on investor numbers
• Ekonomist — September 2026 inflation
• Capital — TCMB rate decision, September 2026
• Dünya — VakıfBank SACE-backed loan
• Bloomberg HT — THY order with Boeing
• BBC Türkçe — Istanbul Governor’s Office measures
• Habertürk — heavy-rain warning
• Evrensel — regional rainfall forecast

Prepared as of 15 October 2026 for information purposes only. Conclusions and scenarios are kept separate from facts. Legislative initiatives are described as of the publication date and are not provisions in force. This is not investment or legal advice.