Friday, January 27, 2012

Beware of Turkish Delight

Beware of Turkish Delight

By ANDREW PEAPLE

Talking Turkey is becoming a common market activity.

The Turkish lira has risen 5.2% against the dollar so far this year, putting it among the world's best-performing currencies. Turkey's government bonds rallied this week as investors' risk tolerance recovered. Yet Turkey is attracting prominent skeptics—among them, the World Bank, the International Monetary Fund and Goldman Sachs—who see its wide current account deficit as a risk that bring its economy to a hard landing. That may prove too gloomy a forecast. But Turkey's policy makers would be wise not to declare victory too soon.

More:HEARD ON THE STREET: Beware of Turkish Delight - WSJ.com