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The euro’s slide to parity with the dollar is producing fresh strains for Turkey’s foreign trade, tourism and external debt liabilities, threatening to further fan the country’s galloping inflation.
The Turkish economy, which had long benefited from a euro stronger than the dollar, is in vulnerable shape now that the tide is turning. Its fragilities owe mainly to the dramatic slump of the Turkish lira amid Ankara’s controversial economic policies, marked by obstinacy in keeping interest rates low despite a dizzying surge in inflation.
