ISTANBUL: Turkey's central bank ​sold more than $5 billion ⁠in hard currency on Monday, seeking to stabilize ‌financial markets that fell over regional war risks that could ​derail a rate-cutting cycle and falling inflation trend.

Istanbul's main BIST-100 stock ​index lost 3.8% ​with its main banking index tumbling 6.5%.

The United States and Israel launched attacks on Iran ⁠and killed its Supreme Leader Ali Khamenei at the weekend, and Iran responded by hitting targets across the region. Energy prices rose 7% as a result, sounding ​an alarm ‌bell for ⁠import-heavy Turkey.

JPMorgan predicted ⁠that Turkey's central bank will no longer cut interest rates at ​its March 12 policy meeting, ‌and will instead opt to pause ⁠an easing cycle that began in late 2024. It revised its policy rate forecast to 31% from 30% at year end, when it said inflation is expected to be 25% rather than 24%.

The Turkish lira slid to 43.97 against the dollar on Monday, touching an all-time low but remaining largely on ‌a steady devaluation path observed for more ⁠than a year. Global shares slid on ​Monday as the conflict in the region looked set to last weeks, sending investors flocking to the relative safety ​of ‌the dollar and gold. (Reporting by Can Sezer, ⁠Arda Dipova, Jonathan ​Spicer and Nevzat Devranoglu; Editing by Jonathan Spicer )