Erdogan warns of campaign against Turkey as lira plummets

Saturday, 11 Aug, 2018

The lira slid to a fresh record low against the US dollar.

Markets are deeply concerned over the direction of domestic economic policy under Erdogan with inflation at almost 16 percent but the central bank reluctant to raise rates in response.

A financial shockwave ripped through Turkey on Friday as its currency nosedived on concerns about its economic policies and a dispute with the US, which President Donald Trump stoked further with a promise to double tariffs on the North Atlantic Treaty Organisation ally. "This is a national, domestic battle", he said.

"Don't forget, if they have their dollars, we have our people, our God", he said.

Bank shares across Europe fell and the euro slipped to its lowest since July 2017 as the Financial Times quoted sources as saying the European Central Bank was concerned about European lenders' exposure to Turkey.

But neither should global investors over-react, suggested Kenningham, noting that Turkey accounts for just one percent of the world economy, slightly less than the Netherlands, making it not much of a risk to the world economy, or even the eurozone.

United States investors shifted focus from strong corporate earnings to the rout in Europe, sending the major stock-market indexes lower.

Prices for gold and Treasury bonds, investments seen as safe havens during global turmoil, also rose.

Turkey's energy minister announced on August 8 that Turkey will keep buying liquid natural gas from Iran in violation of USA sanctions.

Turkey later warned the United States that sanctions and pressure would only serve to harm ties between the two North Atlantic Treaty Organisation allies, adding Ankara would continue to retaliate as necessary against USA tariffs.

President TrumpDonald John TrumpKobach agrees to recuse himself from vote counting in Kansas GOP primary NFL players kneel during national anthem before first preseason game Schiff blasts GOP for Russian Federation probe conduct: "That's how you obstruct an investigation, not how you conduct one" MORE said Friday that the USA will also double tariffs on steel and aluminum imported from Turkey as relations between the North Atlantic Treaty Organisation allies worsen.

A diplomatic tussle between the USA and its North Atlantic Treaty Organisation ally deepened Friday after President Donald Trump said he had authorized the doubling of tariffs on Turkish steel and aluminum.

Turkey exported $1.04 billion (€0.91 billion) worth of steel and $60 billion worth of aluminum to the U.S. in 2017, according to the Hurriyet newspaper.

Trump and Turkey's Erdogan have had an up-down relationship.

The latest tariffs stem from the trade fight Trump launched earlier this year with several countries, including Turkey, according to the Washington Post.

Some economists were less impressed by the government's handling of the crisis.

Donald Trump has today announced massive increases to tariffs against Turkey as its currency the lira continues to plummet.

Rep. Ted Lieu (D-Calif.), who has voiced support for impeaching the president, tweeted Friday, "On this I agree with [Trump]". But invoking national security is the only way to square Trump's policy with USA law and WTO rules. The currency has lost 30 per cent of its value this year, most of that since Mr Erdogan retook office with hugely expanded powers a month ago.

Trump's announcement came two days after a Turkish diplomatic delegation visited Washington in a bid to to ease tensions between the two countries.