Erdogan warns of campaign against Turkey as lira plummets

Glen Norman
August 13, 2018

Trump said via a tweet that the tariff on aluminium imports will be increased to 20 per cent and the tariff on steel imports will be raised to 50 per cent as the Turkish Lira "slides rapidly downward against our very strong Dollar!"

The United States, the world's biggest steel importer, imposed tariffs of 25 percent on steel and 10 percent on aluminum in March for imports from a variety of countries.

On Friday, as the Lira plunged and the USA imposed its higher sanctions on Turkey, Turkish President Erdogan and Russian President Vladimir Putin spoke on the phone.

Some US officials say Turkey is holding Brunson as a bargaining chip after an executive at Turkey's state-owned Halkbank was convicted and imprisoned in the United States in May for helping Iran evade US sanctions.

Trump and Erdogan have discussed Brunson's imprisonment "on several occasions", White House spokesman Sarah Sanders said at the time, adding that Trump is "not happy with Turkey's decision not to release" the pastor.

He went on to say that unilateral actions against Turkey by the USA will "only serve to undermine American interests and security" and said that Washington must "give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives".

"If you have dollars, euros or gold under your pillow, go to banks to exchange them for Turkish lira", he said on national television.

For the Pound, there are no material stats scheduled for release through the day, with the current geo-political storm having a relatively muted impact, the Pound having already been beaten into submission over Brexit and fears of a hard exit from the European Union that is about to have its hands full should Turkey collapse into a financial crisis and begin defaulting on government paper.

In a New York Times article on Saturday, Mr Erdogan warned that Turkey would be forced to seek new friends.

"These are the bullets, cannonballs and missiles of an economic war waged against our country", he said.

Through the early part of the morning, the Turkish Lira was down another 1.92% to 6.9585 against the Dollar, the continued slide gripping the global financial markets at a sensitive time, where an ongoing trade war with China, fresh sanctions on Iran and new sanctions on Russian Federation are already testing market resolve.

The nominally independent central bank has defied pressure over the last few weeks to hike interest rates in the face of high inflation and the collapsing currency. The move came as Washington was in a diplomatic standoff with Ankara over Turkey's detention of an evangelical pastor from North Carolina.

The tweet is another salvo in the growing dispute between Turkey and the U.S. "Because this is the language they understand", he said. TRY pared its losses, down 8% for the day when we starting typing, but it is starting to weaken once again as Erdogan begins speaking with a defiant tone (-11%).

The Turkish unit of currency, the lira, has been dropping due both to the policies of Turkish President Recep Tayyip Erdogan and that country's souring relationship with the United States.

"The US and Turkey are breaking up".

Iran has also suffered from a major tumbling of its currency this year partly over reimposition of United States sanctions after Trump abandoned a 2015 nuclear deal. He also stressed that there are no politicians or countries around the globe that would succeed by pursuing a hostile policy towards Turkey.

The latest escalation between Ankara and Washington was denounced by the Turkish press, with pro-government daily Sabah saying "the currency attack" was no different from the attempted coup of July 2016.

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