Published: Sat, August 11, 2018
Economy | By

Turkish lira in free-fall as Trump doubles metals tariffs

Turkish lira in free-fall as Trump doubles metals tariffs

"It's pretty remarkable how far the Trump administration is willing to go - putting at jeopardy the relationship with a North Atlantic Treaty Organisation ally over a preacher".

U.S. President Donald Trump said on Friday he had authorised higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminium and 50 percent one on steel, as tensions rose between the two North Atlantic Treaty Organisation allies over Ankara's detention of an evangelical pastor and other diplomatic issues. Trump said in an early Friday morning post on Twitter.

Turkey's economy is regarded as fragile because of its high debt, which the global Monetary Fund estimates is 50 percent of its gross domestic product.

Turkey's imports from the USA were worth $1.3 billion in 2017, the ministry added.

ISTANBUL/ANKARA - President Tayyip Erdogan told Turks on Friday to exchange gold and dollars into lira, with the country's currency in free fall after President Donald Trump turned the screws on Ankara by doubling tariffs on metals imports.

The accelerated lira sell-off also deepened concerns about the exposure of banks to Turkey, particularly whether highly indebted companies would be able to pay back loans taken out in dollars and euros after years of overseas borrowing to fund a construction boom under Turkish President Tayyip Erdogan.

This week, the Turkish lira has fallen 23% against the dollar, losing almost a quarter of its value.

The 50-year-old American pastor, who has been charged with "committing crimes on behalf of terror groups", was moved out of prison last month and placed under house arrest.

The sanctions on two officials were announced Wednesday.

Turkish Deputy Foreign Minister Sedat Onal (2nd-L) leaves after a meeting with U.S. Deputy Secretary of State John Sullivan at State Department in Washington, U.S., August 8, 2018, without reaching an agreement.

As the crisis swelled he told his supporters not to worry.

The mere fact that the US would impose sanctions on Turkey - a stalwart North Atlantic Treaty Organisation ally for decades during the Cold War - has increased uncertainty about the future in Turkey.

"The dollar can not block our path".

"I would say we would define progress as Pastor Brunson being brought home", Nauert said. "Don't heed them", Erdogan said Thursday.

The Turkish lira plunged on Friday, raising questions about the country's financial stability, as investors anxious about the president's unorthodox economic policies and a dispute with the United States that has led to sanctions.

'This is a national, domestic battle.

Berat Albayrak, the Treasury minister and Mr Erdogan's son-in-law, is due to announce a "new economic model" for Turkey... The predictable result is this has made inflation get out of control - it is up to 15.9 percent when they are supposedly trying to keep it to 5 percent - because the central bank has been so slow to raise rates, and, in fact, refused to do so at its most recent meeting. 'On some days, I end the day with a loss'.

In 2016, when the dollar began to rise, the Grand Bazaar said it had chose to accept rent in lira to support the Turkish economy. Hard currency debt issued by Turkish banks suffered similar falls.

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