Source: Bloomberg

Turkey’s main stock exchange was forced into back-to-back trading halts as equities headed for their biggest retreat in eight years after President Recep Tayyip Erdogan’s surprise ouster of the country’s central bank chief.

Circuit breakers were triggered for the first time since their introduction in August as the BIST 100 Index sank 5% then extended losses to 7%. A third freeze of 30 minutes will kick in if the equity gauge’s retreat hits 10%. The index was down 9.7% as of 11:45 a.m. in Istanbul.

READ: Turkish Markets Slide as Agbal’s Dismissal Stokes Lira Turmoil

Turkish markets are taking a hit in the wake of Erdogan’s weekend firing of Naci Agbal, whose appointment in November had marked a return to more hawkish monetary policy. The lira tumbled as much as 15% against the dollar during early hours of Asia trading.

“Investors are worried that the replacement of the central bank governor could mark a U-turn in monetary policy setting,” said Mathieu Racheter, an emerging-market strategist at Julius Baer in Zurich, who cut Turkish stocks to underweight.

“While the MSCI Turkey remains the cheapest equity market within our emerging market universe, an increase in inflation will likely lead to a further derating going forward.”

All 100 members of the benchmark BIST 100 Index fell, with Dairy manufacturer Pinar Sut Mamulleri Sanayii AS and real estate investor Ozak GYO leading the declines with losses of 8% and 8.5%, respectively. The Borsa Istanbul Banks Index, where foreign investors’ presence is higher, sank 9.7%.

Turkey’s stock exchange said it was monitoring trading activity continuously and called on investors to act in line with regulations.