Turkey’s embattled financial system needs foreign investors. Its plunging currency shows only the bravest are choosing to stick around.
Turkey has one of the biggest piles of foreign-denominated debt in the developing world, much of which comes due in the next year, and a currency whose dramatic decline makes it ever more expensive to pay off.
The lira USDTRY, +1.4871% has lost a quarter of its value this year against the dollar, and took another leg down Wednesday and Thursday after the Trump administration sanctioned two Turkish officials following Ankara’s refusal to free an American pastor.
Bond yields have exploded higher amid very high inflation and stocks have fallen.
For those foreign investors still left in Turkey the question is: Are the heady yields the country’s markets currently offer worth the volatile ride?
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