Excerpt from VP Tactical first published on 14th April 2014:

We have been flagging Turkey as our top candidate for a currency crisis since we released our Understanding Debt and Currency Crisis thematic in 3Q14.  Although the lira has collapsed from 2.15 then to 2.65 currently, the picture remains dire for Turkey’s external accounts.  The current account deficit remains a hefty 5.8% of GDP and gross external debt remains exceedingly high at $402.4 billion (top chart).  According to our external stress score, Turkey remains one of the most vulnerable economies (bottom chart).


Source: Bloomberg, Macrobond and Variant Perception