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Lira Plunge a Reminder That Fed Isn't Only Emerging Market Risk

  • Turkish currency was already under pressure in wake of Fed
  • Yield from Turkish assets remains in demand from global money
Bloomberg business news

Lira's Plunge And Its EM Contagion Risk

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Emerging-market investors were handed a timely reminder that political risk is never very far away.

The lira briefly tumbled to a record low on Monday morning against a basket of currencies including the euro and the dollar as tensions between Turkey and the U.S. escalated. It’s the last thing the country needs -- with widening twin deficits in Turkey already dampening sentiment together with concern many emerging-market assets will be weakened in a climate of higher U.S. interest rates.