, Columnist
Turkey's in a Mess. Capital Controls Won't Help
Erdogan denies he’ll use them, but investors have good reason to worry.
He won’t allow interest rates to rise. So, what’s the plan?
Photographer: Kostas Tsironis/BloombergThis article is for subscribers only.
What to do when your currency is in freefall? One simple answer is to slam on capital controls and hope it all goes away.
There’s plenty of reason to think this strategy would appeal to Turkish President Recep Tayyip Erdogan. Given that he appears to have little interest in the rate increases that would stop the lira’s descent, some kind of capital control, such as a ban on converting it into foreign currency, might seem like a good solution.