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Turkey and sanctions: the calm before the storm?

Turkey’s financial markets have taken the US sanctions imposed yesterday in their stride, but the threat of harsher measures in the context of the country’s weak external position could result in a fresh sell-off in the coming days. This would act as a headwind to Turkey’s economy, raise the risk of severe strains emerging in the banking sector and temper the central bank’s appetite for further aggressive rate cuts.
Jason Tuvey Senior Emerging Markets Economist
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