Turkish crisis exacerbates existing debt problem
Some economists claim that currency traders are over-reacting about contagion dangers.
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THE Turkish financial crisis exacerbates an emerging market foreign debt problem that has been brewing for some time.
On the face of it, Turkish foreign debt is not too serious. Turkey's foreign currency borrowings aren't too excessive at US$198 billion and 98 billion euros (S$153 billion). Including yen, the total foreign exchange borrowings are estimated at US$292 billion.
Economists from Capital Economics and BMO Capital Markets claim that currency traders are over-reacting about contagion dangers. "Turkey is not a significant player in the global economy" is one of the more sanguine comments.
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