Sovereign risk manager of the year: Turkish Undersecretariat of Treasury

Evren Dilekli, Cavit Dagdas, Ibrahim Çanakci and Taşkın Temiz, Tolga Yucel

Economists call it original sin – financing domestic spending with foreign currency borrowing, which can create a potentially crippling mismatch between the revenue a country raises and the debt it has to repay. Turkey fell into this trap during its economic crisis in 2001, when the lira halved in value against the US dollar, contributing to a situation in which the country’s interest payments alone accounted for 21.8% of GDP and 103.3% of tax revenues, according to the Turkish central bank.

The