{"id":12886,"date":"2015-10-02T06:00:01","date_gmt":"2015-10-02T11:00:01","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12886"},"modified":"2015-10-02T06:00:01","modified_gmt":"2015-10-02T11:00:01","slug":"in-latest-sign-of-em-chaos-turkeys-fx-reserves-fall-below-key-threshold-ahead-of-pivotal-elections","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12886","title":{"rendered":"In Latest Sign Of EM Chaos, Turkey’s FX Reserves Fall Below Key Threshold Ahead Of Pivotal Elections"},"content":{"rendered":"

In Latest Sign Of EM Chaos, Turkey’s FX Reserves Fall Below Key Threshold Ahead Of Pivotal Elections<\/a><\/h3>\n

One of the key things to understand about the veritable meltdown that\u2019s unfolded across emerging markets is that there\u2019s more to the story than the headline risk factors.<\/p>\n

That is, while the list of proximate causes that includes a decelerating China, collapsing commodity prices, and uncertainty over when or even if the Fed will hike goes a long way towards explaining the carnage that\u2019s unfolded across EM, each country has its own set of unique circumstances to grapple with.<\/strong>\u00a0Indeed, the idiosyncratic political risks playing out across emerging economies have taken center stage as Brazil attempts to navigate congressional gridlock, Malaysia struggles with the 1MDB scandal, and Turkey faces new elections in November.<\/p>\n

While there\u2019s no question that the political situation in Brazil is particularly troubling, it would be difficult to imagine a more precarious scenario than that which exists in Turkey, where President Recep Tayyip Erdogan has managed to subvert the democratic process by starting a civil war, and thanks to the strategic significance of Incirlik, the effort is co-sponsored by the US and NATO.<\/p>\n

Of course extreme political uncertainty, a bloody civil war, and an unfolding proxy war just across the border do not inspire much confidence, which helps to explain the fact that\u00a0Turkey\u2019s FX reserves have now fallen below $100 billion for the first time since 2012:<\/strong><\/p>\n

\"\"<\/a><\/p>\n

And here\u2019s an updated look at the lira which is in the midst of a rather epic decline (which threatens to destabilize inflation) thanks to everything noted above combined with a central bank that either i) doesn\u2019t understand the gravity of the situation, or ii) is loathe to hike rates going into the election:<\/p>\n

\"\"<\/a><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

In Latest Sign Of EM Chaos, Turkey’s FX Reserves Fall Below Key Threshold Ahead Of Pivotal Elections One of the key things to understand about the veritable meltdown that\u2019s unfolded across emerging markets is that there\u2019s more to the story than the headline risk factors. That is, while the list of proximate causes that includes […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[90,130,253,1732,1721,6910,553,6793,818,834,4318],"class_list":["post-12886","post","type-post","status-publish","format-standard","hentry","category-economics","tag-brazil","tag-china","tag-elections","tag-emerging-markets","tag-fx-reserves","tag-meltdown","tag-nato","tag-newspaper","tag-turkey","tag-us","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12886"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12886\/revisions"}],"predecessor-version":[{"id":12887,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12886\/revisions\/12887"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}