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Institue of International Finance’s chief economist recently crossed the news wires saying the emerging market capital flows following Turkish lira drop were indicative of a  potential for contagion, as reported by Reuters.

Key quotes

  • Obstacles for IMF  program for Turkey are quite high as it would require higher interest rates, credit tightening.

Meanwhile, according to Turkish officials, President Erdogan held a phone call with German Chancellor Merkel and agreed that their finance minister would have a meeting soon. At the moment, the USD/TRY is down 4.15% on the day at 6.0840.