Turkey: Limping From One Financial Crisis to Another

By Kavaljit Singh | Commentary | September 17, 2000

For over three weeks during the months of November-December 2000, Turkey’s financial system was in deep turmoil. The overnight inter-bank interest rates climbed reached as high as 1700 per cent. At one point, these rates even touched 1950 per cent. Domestic interest rates reached at 60 percent, almost double from the pre-crisis period. As foreign investors started selling equities, the Istanbul stock market became extremely volatile and almost lost half of its value at the beginning of the year. The contagion effects of the Turkish “flu” were also witnessed in the Russian and Hungarian stock markets. As witnessed in the case of the…