Turkey finding it difficult to defend lira as costs mount

running low, Turkey has few options should investors turn decisively against it. Erdogan has ruled out going to the International Monetary Fund.

“The trouble with these measures is that they are stopgap in nature and are not part of a coherent and comprehensive macroeconomic programme to deal with the country’s economic woes,” Desmond Lachman, a former IMF official who’s now a resident fellow at the American Enterprise Institute, said by email. “As such they do little to restore investor confidence.”

With markets warped, some investors are now worried Turkey may struggle to attract the funds it needs. As of February, the nation had over $177 billion of foreign-currency debt to roll over during the next 12 months.

The lira has weakened almost 8 per cent against the dollar this quarter, the most in emerging markets, extending its losses for the year to over 12 per cent. Earlier this month, benchmark government bond yields flirted with record highs, approaching levels not seen since a rout in August.