SINGAPORE (Oct 1): The dramatic collapse of the Turkish lira woke up investors from the dog days of August complacency. Analysts have been warning about macroeconomic imbalances in Turkey for years, but after the recent selloff, investors are now wondering whether the collapse in the lira is down to Turkey-specific issues or if Turkey is a canary in the coal mine. We say the answer is both — Turkey is idiosyncratic, but also a symptom of larger issues that could hit emerging-market (EM) countries more broadly as they deteriorate.

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