Alia Yousuf, Head of Emerging Markets at ACPI Investment Managers comments on the ongoing unrest in Turkey…
The situation in Turkey is extremely fluid and we are monitoring it very closely. We see the unrest as an internal political issue rather than something that would cause us to change our economic forecast for the country.
We are comfortable with the credit matrices of the corporate and banking sector to withstand current market moves on the back of negative sentiment, however we cannot rule out further volatility in the near term given the political situation.
As was shown by the Arab spring, hard-line government responses tend to incite further unrest. The legitimacy of Erdogan’s leadership may be called into question, potentially leading to divisions within the AK party. This may have important repercussions for the planned government reform agenda although the impact at this stage is unclear.