That 16% Turkish Yield Looks Awfully Tempting
Turkey’s risks are finally getting reflected in its asset prices.
He wants to be a strongman. Can he act like an adult?
Photographer: Adem Altan/AFP/Getty Images
Turkish President Recep Tayyip Erdogan will be sworn in on July 8, having secured a first-round victory in the June 24 presidential elections. After the ceremonial flummery, the most important thing for investors will be the amount of independence he bestows upon the central bank. And there is a case to be made for giving Turkish investments a — very careful — look. Because now, you’re getting paid for the risk.
Investment in Turkey really is the home of the brave. The currency has lost a quarter of its value to the dollar this year as Erdogan consolidated power and deprived monetary policy makers of the independence they needed to contain soaring inflation. So while his victory removed some investment uncertainty, his economic announcements this weekend could mark a real turning point.