Country focus Turkey: Difficulties on the Bosporus

The new Turkish lira (TRY) has suffered dramatic losses in recent weeks, a move that has accelerated over the past several days due to new sanctions imposed on Turkey by the USA in response to the continued detention of American pastor Andrew Brunson. As Turkey’s private sector is mainly indebted in foreign currencies, the domestic banks now run the risk of becoming insolvent. And because they in turn are indebted to European banks, the possibility of contagion to the global financial markets has become a major concern.