Turkey unveils new economic plan

Lloyd Doyle
August 10, 2018

"Don't heed them", Erdogan said.

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".

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.96, down more than 7 per cent on the day.

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

Elsewhere, the pound sterling fell sharply against the U.S. dollar to the lowest since June 2017 on a stronger greenback and growing concerns over Brexit deal with the EU. "The dollar, the mollar, will not cut our path", said Erdogan using a figure of speech he repeatedly uses to mock something. On Thursday Ergodan said Turkey will withstand the economic pressure.

"If they have their dollars, we have our people, our God". Turkey's economy is headed for extreme levels of inflation as the price of imports jumps, amid a severe contraction of output as the cost of production inputs rises out of the reach of Turkish businesses.

Washington has demanded the pastor's release and imposed financial sanctions on two Turkish ministers and warned of additional measures.

In this file photo taken on July 25, 2018, United States pastor Andrew Craig Brunson is escorted by Turkish plainclothes police officers to his house on in Izmir.

Meanwhile, markets are deeply concerned over the direction of economic policy under Erdogan with inflation almost 16 percent but the central bank reluctant to raise rates in response.

But President Erdogan brushed off any concerns during a speech in the northeastern city of Bayburt on Friday, saying: 'The dollar can not block our path.

The lack of central-bank action to support the currency is also spooking investors and Erdogan's previous comment that interest rates are the "mother and father of all evil" hasn't helped.

Erdogan and his newly appointed finance minister, Berat Albayrak, are due to speak at 2 p.m. local time Friday.

Erdogan's characteristic defiance in the face of the crisis has further unnerved investors.

On Friday, the euro sagged to a 13-month low against the dollar, down 0.7 per cent to $1.1450, after the Financial Times reported that the European Central Bank was anxious about possible losses at eurozone banks operating in Turkey.

Turkish companies have borrowed roughly US$300 billion in foreign currency, and now have to repay it in devalued Turkish lira.

Obviously a real Turkish crisis would have knock-on effects, though Berenberg sees Europe's exposure to Turkish banks as being too small to cause much harm.

Treasury and Finance Minister Berat Albayrak has vowed to execute Turkey's new economic model together with "all national and worldwide stakeholders", while stressing that a "decisive" approach and the Central Bank's independence would be maintained.

Other reports by Iphone Fresh

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