Lira Drags Emerging Currencies Down With It as Contagion Spreads

Credit default in developing nations rises to April 2017 high
Turkey turmoil adds to list of woes for emerging markets

Bloomberg’s Colleen Goko-Petzer reports on how emerging markets are impacted by the Turkish lira.Markets: European Open." (Source: Bloomberg)

Provide news feedback or report an error

Confidential tip?

Send a tip to our reporters

Site feedback:

Take our Survey

By Cormac Mullen and Dana El Baltaji

August 13, 2018 at 3:01 AM UTC

Updated on

August 13, 2018 at 1:23 PM UTC

This article is for subscribers only.

Hardly any emerging-market currencies were spared from Turkey’s troubles, putting an index that tracks the units on course for its biggest four-day drop since 2016 as appetite for risky assets dried up.

The MSCI Emerging Markets Currency Index fell to the lowest level in more than a year on Monday after President Recep Tayyip Erdogan showed no signs of backing down in a standoff with the U.S. administration, deepening concern that Turkey is sliding toward a full-blown financial crisis. The lira sank as much as 11 percent, the rand 9.4 percent and Mexico’s peso 2.4 percent.