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Contagion Fears Return as Turkey Keeps Investors Trapped in Lira

  • South Africa’s rand, Brazil’s real seen as most vulnerable
  • High-beta currencies are seen as more vulnerable ones
Turkish Lira Turkey

Photographer: Kerem Uzel/Bloomberg

Updated on

The most vulnerable corners of emerging markets are bracing for turbulence as Turkey’s stand-off with investors begins to test the nerves of traders.

Currencies from South Africa’s rand to Brazil’s real are witnessing a spike in their expected volatility, signaling concern they may weaken the most along with the lira over the next month. The price-swings have evoked memories of last year when a meltdown in the Turkish exchange rate spurred panic selling across emerging markets.