(Harvest)The crisis in Turkey is rapidly evolving, with new developments emerging every day. Turkish assets sold off significantly from August 8 to 13, before experiencing a short covering rally beginning on August 14. Perhaps the selloff was overdone, or perhaps not. Either way, the trajectory for Turkey has not changed. We believe Turkey remains on an unsustainable path and has done little to address large imbalances and low investor confidence. The highly leveraged corporate sector has become increasingly vulnerable with the weaker Turkish lira, given the country’s large amount of non-lira debt.
Don’t be Fooled by the Rally: Turkey Remains Under Pressure
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