An investment expert warned that Turkey is not the only country that may face a currency crisis

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November 24, 2021 14:11 GMT

The Turkish lira fell, on Tuesday, to a record low after the country’s president, Recep Tayyip Erdogan, insisted on his controversial policy of cutting interest rates amid high inflation.

Turkey will not be the only country facing a currency crisis If the expectations of higher interest rates in the United States are confirmed, according to the famous American investor Mark Mobius.

in a to interview On CNBC, Mobius responded in the affirmative to the question of whether the sharp devaluation of the lira, Turkey’s national currency, could spread to the economies of other countries. “With interest rates rising in the US, everyone Countries with dollar debt will be affectedsaid the investor.

This Tuesday, the Turkish lira collapsed to a record low of 12.8 against the US dollar, a day after the country’s president, Recep Tayyip Erdogan, insisted on his controversial policy of cut interest rates amid rising inflation.

Countries at risk of currency crisis

According to the Damocles Emerging Currency Index, compiled by investment bank Nomura, four emerging economies are in particular At risk of suffering from a currency crisis: Egypt, Romania, Turkey and Sri Lanka.

“Looking into the future, the possibility that the Fed [de EE.UU.] Monetary policy normalization amid China’s economic slowdown is not a particularly good match [para los mercados emergentes]Nomura pointed out in his book ReportIt was published last week.

This month, the US Federal Reserve plans to start Slow down your asset purchases. This comes at a time when emerging markets are facing a number of challenges, such as increasing fiscal and current account deficits, as well as rising food prices.