EBRD has stress-tested for 40% Turkish lira crash
The European Bank for Reconstruction and Development has passed internal stress tests for a 40% drop by the Turkish lira - but the currency has weakened more than that this year.
The exercise, which was done in response to the lira's accelerating decline and relayed privately to the development bank's 67 government shareholders at a board meeting last month, concluded it could withstand such a slump, although it would suffer losses.
"It is rather serious, but it would not threaten the bank's financial position," the source said, referring to impact of the lira's crash. Turkey has become the EBRD's largest country of operation since it stopped lending in Russia 2014. It has a combined 7.3 billion euros of projects, loans and equity stakes in the country.
