Published: Sat, August 11, 2018
Business | By Tara Barton

Turkish lira tumbles to fresh low

Turkish lira tumbles to fresh low

Turkish President Recep Tayyip Erdoğan said Friday that his country was the target of a global financial war and urged citizens to exchange their dollars, euros and gold for lira to bolster the economy.

And so he announced he is going to double the steel and aluminum tariffs on them to make up for the fact "their currency" has slid so "rapidly downward against our very strong Dollar!"

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

Consistently deteriorating relations between the USA and Turkey over recent years have risen to alarming levels, dealing a severe blow to both Turkey's economy and its currency.

"This innocent man of faith should be released immediately", Trump previously wrote on Twitter when it became clear Turkey would not release the evangelist, who was ordered to be held under house arrest.

High-level meetings in Washington between USA and Turkish officials over Brunson ended this week, apparently without a resolution.

"This is a domestic and national struggle", Erdogan said according to CNBC.

"The dollar, the mollar, will not cut our path", said Erdogan, adding Turkey had alternatives "from Iran, to Russian Federation, to China and some European countries".

The tumble in Turkey's currency on Friday signaled deepening pessimism about the country's economy after months of market declines. "Don't worry", Erdogan told a crowd in the northeastern city of Bayburt. This will be my people's response to those who have waged an economic war against us'.

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Erdogan called on Turks to not be concerned about exchange rate movements, mockingly declaring "the dollar, the mollar will not cut our path".

The news didn't help Turkey's fast-depreciating currency, which found a fresh record low on Thursday, falling 4% to 5.49 per United States dollar.

The lira is now down 36% this year and bond yields have sky-rocketed.

Russia's dollar-traded RTS index plunged over three percent, Brazil Bovespa index was losing 2.3 percent, and the Turkish Borsa Istanbul index saw a 5.4 percent sell-off. The U.S. was Turkey's biggest export market for steel past year, though exports have fallen since.

"I would say we would define progress as Pastor Brunson being brought home", Nauert said.

Meanwhile, investors are anxious about the economic policies of President Recep Tayyip Erdogan, who won a new term in office in June with sweeping new powers. "It is a national fight", he said. "If they have the dollar, we have Allah", he said in a speech early today.

After winning a June election with revamped powers, Erdogan tightened his control over the central bank and appointed his son-in-law Berat Albayrak to head a newly-empowered finance ministry.

Erdogan, a self-described "enemy of interest rates", wants cheap credit to fuel growth, but investors fear the economy is overheating. Hard currency debt issued by Turkish banks suffered similar falls.

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