Published: Thu, August 16, 2018
Business | By Tara Barton

Turkey's president threatens boycott of iPhones, other United States electronics

Turkey's president threatens boycott of iPhones, other United States electronics

Asian markets on Monday were sent reeling from the fallout of Turkey's lira troubles, which saw the currency-which has declined by 50 percent over the past 12 months-hit a record low against the dollar following concerns over higher United States import tariffs on Turkish steel and aluminum.

Erdogan admitted the Turkish economy had problems - including a widening current account deficit and inflation of nearly 16 percent but added: "Thanks to God, our economy is functioning like clockwork".

The dollar this week rose to a 13-month high against a basket of currencies, getting an extra boost as emerging markets have sold off on concern about contagion from Turkey and investors sought a safehaven in the USA currency.

Albayrak said Tuesday Turkey would press ahead with its action plan to prop up the lira against the dollar, calling for a trade that is conducted "in our own currency".

The ringgit tumbled yesterday to an eight-month low against the United States dollar as the currency crisis in Turkey continued to spook emerging markets (EMs), and the local currency is expected to remain under pressure with many economists predicting that it will fall further in 2018.

IFF emphasized that the depreciation will shrink the current account deficit of Turkey.

"We will produce every product we are importing from overseas with foreign currency here and we will be the ones exporting these products". A decade of easy money and low interest rates in the United States and European Union following the 2008 financial crisis led to investors searching for higher yields to emerging markets like Turkey. Here, road paint reads: "Slow down".

Investors have pulled back money from emerging markets in recent months as the US Federal Reserve has steadily raised interest rates and is cutting back on easy money policies in response to a robust American economy.

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Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation of both diplomatic and trade tensions between the USA and Turkey has reminded investors that it is not just the United States and China that stand at the heart of the global trade war concerns.

It was unclear whether Erdogan was referring to a trade war, or whether he was making a statement about military preparedness.

"The most exposed country with respect to Turkish Lira is actually Italy, who are one of the largest trading partners and have significant ownership of a Turkish bank and Spain as well". Erdogan has been fighting the Turkish Central Bank for years, at great risk, against high interest rates, while his desire to create an Islamic class of entrepreneurs has distorted public tenders.

U.S. President Donald Trump has slapped hefty tariffs on a swathe of Chinese goods, prompting retaliation from Beijing.

Turkish lira banknotes are pictured at a currency exchange office in Istanbul, Turkey on August 13, 2018. More than 30 percent of the lira's loss has come since June, when Erdogan took over the office with new sweeping powers.

In the last 24 hours or so, with Erdogan's Treasury and Finance minister - who's also his son-in-law - pledging to defend the Turkish lira, there has been some respite for both the lira and other emerging market currencies.

It said holidaymakers are able to get 4,091 lira for £500 this summer, as opposed to just 2,174 lira in 2017.

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