TROUBLE IN TURKEY: Currency PLUNGES 20% After Trump DOUBLES Metal Tariff

Lloyd Doyle
August 11, 2018

It was reported that Erdogan's son-in-law and Turkey's new finance minister, Berat Albayrak, were set to unveil a "new economic model" on Friday, but the announcement did little to reassure investors.

Turkey on Friday warned a move announced by US President Donald Trump to double steel and aluminium tariffs on the country would harm ties, vowing retaliation against a measure it said was against WTO rules.

Ankara and Washington, NATO allies, have been at loggerheads over the detention in Turkey of USA evangelical pastor Andrew Brunson on terrorism charges, prompting U.S. sanctions on two of Erdogan's ministers and threats of trade restrictions.

It did not disclose details, but suggests Turkey might gravitate further away from its North Atlantic Treaty Organisation allies towards co-operation with Russian Federation, whose relations with the West are at their lowest since the Cold War. "Aluminum will now be 20 percent and Steel 50 percent", he said in a Twitter post.

President Donald Trump announced Friday that he plans to double steel and aluminum tariffs on Turkey - prompting the lira to plunge 20 percent - amid heightened tensions between the two North Atlantic Treaty Organisation allies.

Investors piled into "safe" government debt, with German yields hitting three-week lows and the yield on the benchmark USA 10-year Treasury note falling to 2.88822 percent.

On Friday, Erdogan asked Turkish citizens to sell off their gold and dollars and exchange them for the lira, in an attempt to prop up the currency. "This is a national, domestic battle", he said.


Indeed, through Thursday, the Turkish lira had lost 32 percent of its value against the dollar just since the beginning of the year.

It all started with Turkey's own mistakes - or, more accurately, with Turkish President Recep Tayyip Erdogan's. "It is a national fight", he told a crowd in the northeastern city of Bayburt.

While Turkey and the United States disagree over a host of issues, the most pressing disagreement has been over Brunson and the detention of other U.S. citizens in Turkey. Erdogan has appealed to the people to convert their dollars to liras, saying Turkey is in the midst of an "economic war" with the West. Lindsey GrahamLindsey Olin GrahamGOP lawmaker: Every white suburban district in the country will be a swing district this year The Hill's Morning Report - Trump to GOP: I will carry you GOP senator: "Real likelihood" Dems win the House "by 10 or 12 more seats than they need" MORE (R-S.C.) tweeted Friday. They do not fully exclude an option of a massive hike by the TCMB and believe that probability of capital controls has greatly increased.

He also said increasing production, exports and employment was the best response to the country's challenges.

The slump is attributed to the tensions with the U.S. and concerns about President Recep Tayyip Erdogan's control of monetary policy.

What's happening to Turkey's currency right now?

The MSCI All-Country World index, which tracks shares in 47 countries, was down 0.6 percent on the day, having erased all its gains for the week.

Other reports by Iphone Fresh

Discuss This Article

FOLLOW OUR NEWSPAPER