4 min read.Updated: 20 Jan 2022, 01:14 AM ISTRahul Jacob
Turkey, Russia and Sri Lanka show notably common patterns as badly managed economies
Examining the tea leaves for 2022, one prediction seems quite straightforward: Emerging markets may need to be renamed submerging markets. Exhibit A in this investment class to avoid is Turkey, whose currency lost almost 40% against the dollar last year, in large part because, prodded by its erratic president, its central bank has been cutting interest rates as inflation soars. In late 2021, things became riskier still when it launched a scheme to encourage depositors to hold money in Turkish lira by guaranteeing them against future currency losses. The scheme boosted the lira for a little while, but the central bank has had to step in, expending billions to shore up the lira.