Can Turkey rewrite the rulebook for crises in emerging markets?

By rejecting the conventional approach, ErdoAan risks greater trouble - and not just for Turkey

Whether by accident or design, Turkey is trying to rewrite the chapter on crisis management in the emerging-market playbook. Rather than opting for interest-rate hikes and an external funding anchor to support domestic policy adjustments, the government has adopted a mix of less direct and more partial measures - and this at a time when Turkey is in the midst of an escalating tariff tit-for-tat with the US, as well as operating in a more fluid global economy. How all this plays out is important not only for Turkey, but also for other emerging economies that already have had to cope with waves of financial contagion.

The initial phases of Turkey's crisis were a replay of past emerging-market currency crises. A mix of domestic and external events - an over-stretched credit-led growth strategy; concerns about the central bank's policy autonomy and effectiveness; and a less hospitable global liquidity environment, owing in part to rising US interest rates - destabilised the foreign-exchange market.

Related: Turkey buys time before day of IMF reckoning