Why the Turkish lira is imploding
Why the dramatic loss in confidence
The linchpin of the disaster was Turkey's current account deficit -- it's need to attract foreign capital in order to pay its debts and keep its economy going. The country has an external financing requirement of about $218 billion.
Much of that was borrowed in foreign currencies and that's going to make it very difficult for those companies to pay the bills when they're due.
The problems have been compounded by the currency slide in other ways too. That's sparked inflation and for a time, the central bank governor was a strong technocrat. But recently Erdogan appointed his son-in-law to lead the central bank and the belief is that he will no longer raise rates when necessary. In turn, that's led to more money fleeing the country and more of a need for hikes.
Finally, Turkey has been hit with one thing it can't control: High fuel prices. Turkey is a major importer and that's strained its ability accumulate foreign reserves.