phases: How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion, according to The Guardian. The initial phases of Turkey's crisis were a replay of past emerging-market currency crises. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the US, as well as operating in a more fluid global economy. A mix of domestic and external events an over-stretched credit-led growth strategy; concerns about the central bank's policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising US interest rates destabilised the foreign-exchange market. And all of this occurred in the context of a more uncertain and aside from the US weakening global economy. A political spat with the US accelerated the run on the Turkish lira by fueling a self-reinforcing dynamic.
(news.financializer.com). As
reported in the news.
Tagged under phases, contagion topics.