INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Turkey could be at a risk of a major default, as it is sitting on very high foreign currency debt, said Russell Napier,
other emerging markets and Prime Minister Narendra Modi is in a strong position
He said Modi has built incredible credentials for his government.
Yet, it may be hard for India to escape a Turkey contagion
"Turkey has done some really silly things which all the emerging markets have not done and the EMs will be penalised because one of them has
Turkey owes $467 billion to investors and it will be hard for the country to pay that debt, Napier said.
The Turkish lira has weakened 35
per cent against the US dollar this year, with losses fuelled by a deterioration in ties between the NATO allies and fears of President
Turkey.
Turkey has always been more risky market within broader emerging markets basket and a fallout of its default will be on European
banks, he said.
The dollar has gained strength over the past few weeks due partly to the Turkey crisis and a strong dollar is never good for
emerging markets equities, as people tend to follow the dollar for reasons beyond know, he said
Yuan devaluation could be the worst part of all the ramifications emanating from the Turkey crisis, Napier said
