Trump doubles tariffs on Turkish steel and aluminum, says relations 'not good'

Cornelia Mascio
Agosto 10, 2018

President Tayyip Erdogan told Turks on Friday to exchange their 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.

"Change the euros, the dollars and the gold that you are keeping beneath your pillows into lira at our banks".

Erdogan has previously called himself "an enemy of interest rates" and told state TV ahead of his speech today "we will not lose the economic war".

"This will be my people's response to those who have waged an economic war against us". 'On some days, I end the day with a loss'.

"It is astonishing that no matter how punished the Lira looks, traders are showing absolutely no indication that they are finished with pricing in "bad news" into the market", Ahmad said.

"The dollar can not block our path".

He said Turkey was not afraid of "threats" and added Turkey had "alternatives" for economic cooperation in many places "from Iran, to Russian Federation, to China and some European countries".

Erdogan said that there were "various campaigns being carried out" against the country.

One of the triggers of the turmoil has been a standoff with the USA over a detained American pastor that Turkey, a North Atlantic Treaty Organisation ally, has put on trial for espionage and terror-related charges linked to a failed coup attempt in the country two years ago.

Both countries have imposed sanctions on senior ministers and the countries failed to make progess during talks this week.

High level meetings in Washington between US and Turkish officials over a detained American pastor ended this week without an apparent resolution.

Inflation stands at almost 16% but Turkey's central bank is reluctant to act - especially with the president having described himself as an "enemy of interest rates".

On August 1 Washington announced sanctions against Turkey's justice and interior ministers, prohibiting United States entities and citizens from doing business with them, after threatening to impose "large sanctions" if Ankara failed to free Brunson. His comments on interest rates - and his recent appointment of his son-in-law as finance minister - have heightened perceptions that the central bank is not independent.

Turkish President Tayyip Erdogan addresses his supporters in Bayburt, Turkey August 10, 2018. As the lira falls in value, the debt becomes harder to pay.

European Central Bank concerns are growing over EU banks' exposure to the slide of the Turkish lira, reports the Financial Times.

"People looking at things this morning are much more aware that there is central (major) contagion risk", said David Owen, chief European economist at Jeffries in London.

"For some time now investors have been looking at the unfolding currency crisis in Turkey as a local difficulty", noted CMC Markets UK analyst Michael Hewson.

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