Troubled Turkey

With the Turkish Lira down 26% last week and 41% YTD, Turkey’s in crisis. The declining lira has pushed inflation to 16%, short-term interest rates to 23%, and its huge debt, over half of which is foreign-denominated, will be much harder to repay. Turkey’s new finance minister, President Erdogan’s son-in-law, is utterly unqualified. Turkey desperately needs an IMF bailout to calm markets but will probably impose growth-sapping currency controls instead.