Market history · Emerging markets ·
The Turkish lira crisis
On 10 August 2018 the Turkish lira plunged as investors worried about inflation, dollar-denominated corporate debt, central-bank independence and a diplomatic row with the US. Between January and mid-August it fell by more than a third against the dollar.
Turkey's central bank raised rates sharply in September, and the shock spread briefly to other emerging markets that shared its vulnerabilities.
The takeaway
A currency mismatch in borrowing is the classic emerging-market weak point.
Sources
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