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Goldman Spillover Index Signals Lira Contagion Risk Limited

Netty Idayu Ismail, Filipe Pacheco
Goldman Spillover Index Signals Lira Contagion Risk Limited

Emerging-market investors worried about potential contagion from Turkey’s deepening crisis may find some solace in Goldman Sachs Group Inc.’s spillover index. With the exception of Russia’s ruble, recent moves in developing-nation currencies have generally been smaller than what the gauge predicted despite the Turkish lira’s plunge, Goldman Sachs said in a report dated Aug. 10. The lira has plummeted 28 percent this month as President Recep Tayyip Erdogan refused to bow to U.S. political demands and market pressures.