Turkish Lira Plummets; Erdogan Pledges Economic War

The lira went into free-fall sinking more than 10 percent

I hope we can soon get Pastor Brunson and other Americans released in a win-win fashion for both the United States and Turkey."Trump's move to double tariffs on Turkey was even praised by one of the president's most frequent Democratic critics".

Relations between the two countries deteriorated in the wake of US President Donald Trump's decision to increase tariffs on Turkish aluminum and steel to 20% and 50% respectively.

But the souring in U.S. -Turkey relations could give new strength to Russia-Turkey ties, already a source of concern among Turkey's Western allies.

Turkey and the US are now experiencing rocky relations following Washington's imposition of sanctions on Interior Minister Suleyman Soylu and Justice Minister Abdulhamit Gul for not releasing American Pastor Andrew Brunson, who faces terrorism charges in Turkey. "But if the United States can't handle relations with Turkey ... then a further deepening of relations with Moscow is an option".

Trump's "jubilation in inflicting economic hardship on its North Atlantic Treaty Organisation ally Turkey is shameful", he wrote.

The currency's drop - 40% so far this year - has become a gauge of fear over a country facing the fallout of years of debt-fuelled growth, worldwide concern over President Recep Tayyip Erdogan's push to amass power, and a souring in relations with allies like the US.

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"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks". In his speech in the northeastern city of Bayburt, Erdogan added that he would decisively defend the country against economic attacks.

He appeared to blame foreigners for trying to hurt Turkey, saying: "This will be my people's response against those waging an economic war against us".

Erdogan's comments offered no support for the currency, which fell as he spoke.

Turkey's lira sank as low as 20 percent against the USA dollar Friday before settling at a 15 percent drop. "Nevertheless, we implore President Trump to resume negotiations".

Erdogan said Turkey is not afraid of outside "threats".

Mr Erdogan's "tight grip" on the central bank and the fact "higher interest rates do not fit with Turkey's economic growth strategy" meant that the central bank has kept interest rates on hold, Nora Neuteboom, economist at ABN Amro, told AFP.

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In 2017, 19 billion dollars worth of goods were traded between the US and Turkey.

The lira has always been falling on worries about Mr Erdogan's influence over monetary policy and worsening relations with the United States.

For those looking to make GBP to ZAR payments, this is the best opportunity to do so since July 05; we are seeing retail rates as high as 17.87 with independent providers, while high-street banks are offering in the 17.30-17.40 region.

"Another source of frustration relates to the partnership between the United States and the P.Y.D./Y.P.G., the Syrian branch of the P.K.K., an armed group that is responsible for the deaths of thousands of Turkish citizens since 1984 and that is designated a terrorist group by the United States".

Deteriorating ties between the USA and Turkey - both North Atlantic Treaty Organisation members - have also alarmed investors.

Amid the dispute, foreign investors could be spooked and try to pull their money out, reinforcing the currency drop and potentially leading to financial instability.

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Champion Manchester City had already signed winger Riyad Mahrez for a club-record GBP60 million from Leicester City . Just before the deadline, Everton secured the services of Colombian World Cup star Yerry Mina from Barcelona .


Albayrak, who formerly served as energy minister, yesterday announced what he has described as a "new economic model" for Turkey but he focused on macro-economic issues and steered well clear of tackling the currency crisis.

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