Having tried to defy internal and external economic logic by repeatedly cutting interest rates, Turkey opted this week for a new set of unorthodox measures to stabilise its currency.
Whether the authorities are more successful ultimately this time around boils down to a simple question: will Turkish households and companies view this “circuit breaker” as a bridge to a more comprehensive set of measures that address the underlying drivers of economic and financial instability or, instead, as a destination that soon proves inherently unstable?
It is hard to put into words how disorderly the Turkish currency markets had become by Monday afternoon. The lira had weakened to beyond TL18 per US dollar, constituting a halving of its value in just two months.