Mobius warns of 'real possibility' of capital controls in Turkey

(Aug 14): There’s a “real possibility” Turkey will impose capital controls to stem the plunge in the lira, which would be bad for the whole developing-nation asset class, said veteran emerging-markets investor Mark Mobius.

“If Turkey is forced to close the foreign-exchange window so that foreign investors cannot get out, that will be a very, very bad example for other emerging markets," Mobius said in a Bloomberg TV interview with Rishaad Salamat and Haidi Lun. “As you know in the past during the Asian crisis, Malaysia did that and it was was very, very bad news.”

While some investors are starting to weigh the possibility, the Turkish government has said repeatedly it won’t limit the flow of foreign money in and out of the economy. President Recep Tayyip Erdogan said over the weekend that the country wouldn’t raise interest rates or accept an international bailout.

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