At the beginning of November, Turkey’s exchange traded fund (ETF) was flying high. Now it’s down 11% in the last month. What just happened?

The country, in short, has been concerned by both the rapid influx of investor cash and fast credit growth. To slow that some, Joe Parkinson for The Wall Street Journal says Turkey’s central bank cut benchmark interest to 6.5%–a record low. [Turkey ETF: What Is Going Right.]

A day later, policymakers announced that bank reserve ratios would be hiked to 8%, draining $4.9 billion Turkish lira from the market and reducing the amount of money that could be loaned. [Eastern Europe ETFs Outperform.]

The moves came around the same time that the International Monetary Fund (IMF) said Turkey needs more fiscal tightening and that liquidity is still excessive, says Forex Yard.

Given that iShares MSCI Turkey (NYSEArca: TUR) is more than 50% allocated to Turkey’s financial sector, it’s not surprising that it was smacked by the new requirements. The markets in Turkey are clearly still digesting the central bank’s moves and TUR fell below its 200-day moving average, so you may want to keep an eye on this one for now.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.