Amidst a post-election surge in emerging market currencies around the world there remains one conspicuous outlier: Turkey’s lira.

Unlike peers in Brazil, Russia, and Mexico, the lira was testing new lows of 8.5445 against the US dollar last week on news of a possible Biden victory and divided congress.

The currency is now down around 30% this year.

A new currency crisis in the making?

The threat of a currency crisis in Turkey is nothing new; in fact, since the lira’s meltdown in 2018, currency volatility has emerged as a consistent feature of the Turkish economy.

What’s behind this consistent pressure on the lira? Some of the causes are structural and stretch back several years.