Forget Italy, Turkey Is The Main Course
by Tyler Durden
ZeroHedge.com
Dec 5, 2016
While investors are focused on Italy, Bloomberg’s Mark Cudmore warns that another Mediterranean country is poised to grab their attention very soon. A currency crisis in Turkey is rapidly deteriorating, setting the stage for dramatic and unscheduled central bank action.
The lira has weakened by more than 11% in the last six weeks against an equally weighted dollar-euro basket. This devaluation is exacerbating the situation rather than providing a relief valve.
Turkish corporates’ FX liabilities have expanded at an extraordinary pace in recent years. As of August, they exceeded their FX assets by $210.5 billion dollars — an increase of 15% on the previous year.
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