In US dollars, Turkey’s stock market now trades 34% lower than its August 29, 2017 level, and half of its early 2015 value. Falling bank share prices accounted for most of today’s 1.5% decline.

Turkey financed, or better said, stoked, a current account deficit of 6% of GDP through foreign-currency loans to corporations. Now the banks face a prospective jump in defaults as their corporate borrowers have to pay back dollar and euro loans in depreciating Turkish lira.

The lira has seen a near 20% decline versus the dollar this year alone. The freefall was stopped briefly over the past several weeks after a surprise rate hike. But expectations of another hike on Thursday have not kept the lira from falling again.

The currency crisis comes ahead of crucial presidential and parliamentary elections, moved up on the calendar to June 24, by President Tayyip Erdogan on the heels of a military success in Syria. Erdogan was once seen as a shoe-in to consolidate newly codified executive powers with a win but now faces greater uncertainty amid the economic woes.

The election has also hamstrung the government to make prudent decisions on economic policy, as The Financial Times reported this week.

“Going into an election, it is next to impossible for any government to introduce anti-inflationary policies,” said Ilter Turan, professor of political science at Istanbul’s Bilgi University. “Tackling inflation requires belt-tightening measures and adjustments in interest rates.”