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As Turkey financial crisis deepens, bankers to review impact of shocks

Biggest currency shock for lira since 2001 rattles investors; plunge stokes fears of contagion

TurkeyPresident Tayyip Erdogan
Turkey President Tayyip Erdogan. Photo: Reuters

As investors worry about Turkey sliding toward a full-blown financial crisis, the big question now is how far the pain might spread. A plunge in the lira sent tremors through global markets on Friday as tensions flared between the US and Turkey, a pair of NATO allies. At one point, the currency fell as much as 17 per cent against the dollar, fanning fears that the financial tumult could infect Europe and faraway emerging markets. The most immediate issue for Turkish policy makers is the financial system, which is exposed to interest- and exchange-rate shocks. Four people ...