Turkey Financial Crisis Erupts, Stoking Concerns of Contagion
- Lira plummets most since a 2001 crash that sank Turkey’s banks
- Bunds, Treasuries gain as investors seek havens; rand sinks
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Turkey entered a full-blown financial meltdown on Friday, sending tremors through global markets, after President Recep Tayyip Erdogan declared his refusal to bow to U.S. political demands and market pressures.
The unraveling was swift, highlighting the fragility of Turkey’s economy after years of a growth-at-all-costs policy bias that left its companies saddled with hundreds of billions of dollars in foreign debt. The lira plunged as much as 17 percent on Friday alone, bringing its loss for the year to 42 percent and raising the specter of contagion into Europe and across other emerging markets.