Erdogan vows to defy United States 'threats' after currency crash

One US dollar bought 5.57 lira during evening trading yesterday

One US dollar bought 5.57 lira during evening trading yesterday

The Turkish lira TRYTOM=D3 has always been falling on worries about Erdogan's influence over monetary policy and worsening relations with the United States.

The lira dropped by over 11 percent in value in one day on Friday morning to almost six lira per dollar.

This week was interesting also because, after several months, banking stocks showed some life, particularly SBI and ICICI Bank.

The collapsing Turkish lira, which has lost about 70% of its value Vs USD this year largely over worries about Erdogan's wider control of the economy has marked an time lows YTD.

President Donald Trump said in a tweet Friday that he would hit Turkey with additional tariffs, as their national currency continues to drop. Financial upheaval there risks further destabilising an already volatile region.

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.

Jackson said the weakness of the lira would boost competitiveness for Turkey's exports, but the tariffs on steel and aluminum would offset that.

"Shame on you, shame on you", he said in remarks directly addressed to Washington.

"Their currency, the Turkish lira, slides rapidly downward against our very strong dollar!"

Erdogan, who was re-elected two months ago, told Turks not to panic - but paradoxically urged them to buy lira to fight an "economic war". "It could serve as a template for further tariff actions against China if the renminbi depreciates further relative to the dollar, even if that depreciation were mainly a reflection of the relative strength of the USA and Chinese economies".

This came in the wake of sanctions imposed by Mr Trump for Turkey's refusal to free pastor Andrew Brunson, who the nation detained on terror charges despite the insistence of the United States he is innocent. "You are exchanging your strategic partner in North Atlantic Treaty Organisation for a priest". Thus, Trump's tweet suggests that any country that enters a time of economic turmoil - and consequently, sees the value of its currency fall - is a fair target for punitive trade actions by the United States.

A delegation of Turkish officials held discussions with their counterparts in Washington this week but there was no sign of a breakthrough.

Erdogan added that Washington had always "failed to understand and respect the Turkish people's concerns".

Higher tariffs "could raise some of the costs for the US, or rather offset some of the falling prices that they [US manufacturers] enjoyed", he added.

Erdogan replied that Turkey will not back down despite Trump's sanctions policy and said he would answer with mirror retaliation.

-Turkish relations is a dispute over an American clergyman who has been jailed in Turkey since December 2016.

The Turkish lira has fallen more than 10 percent since last week when the United States slapped sanctions on two Turkish ministers. It is host to a critical part of the Western alliance's missile defense system again Iran.

Mr Erdogan said although the nations had been allies for decades, Turkey "now has alternatives".

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