Turkey Capital Controls May Bring 'Death Spiral,' Says Mostaque

The video discusses the likelihood of Turkey implementing capital controls, estimating it to be less than 10%. It highlights the potential negative impact of full-scale controls on the economy. The Turkish banking system's reliance on foreign currency deposits and the challenges of mismatched liabilities are examined. Alternatives to capital controls, such as macroprudential measures and international alliances, are considered. The need for foreign direct investment to address the current account deficit is emphasized, along with the risks posed by capital controls to financial inflows.

What challenges does Turkey face in attracting foreign direct investment?

How does Turkey's reliance on foreign financial inflows impact its economy?