“How stressed are emerging mkts vs developed mkts? The gap between implied FX vol for EM (surging) and G7 (still subdued) is extreme, only observed a couple other instances in the last 18yrs; How will it correct? Probably some combo of lower EM & higher G7 FX vol,”
Turkey had $78b in FX reserves left which they have been burning this week to avoid the downward spiral, but none of the conditions that caused it have changed. Soon, Turkey will stop burning $, to save a little or because they run out, and spiral will resume even faster.