JPMorgan: No “Currency Crisis” In Turkey As Credit Risk Soars Past Pakistan

Though questions have been raised on the possibility of a “currency crisis” since the recent failed coup in Turkey, analysts at JPMorgan rule out the possibility as local residents are not dollarizing deposits and Turkish banks have the ability to roll over short-term external debt. Saad Siddiqui and colleagues suggested in their July 22 research piece titled “EMEA EM Local Markets Compass” that investors be selective in pursuing EM FX carry strategies in August. EM bond funds witnessed large inflows in July Siddiqui and team argue that the rally in EMEA EM rates and currencies has paused over the past week after…