Sunday, 21 October, 2018

Erdogan Tells Turks to Buy Crumbling Lira as Trump Turns the Screws

A vendor gets a five Euro bank note from a customer at the central market in Athens A vendor gets a five Euro bank note from a customer at the central market in Athens Greece
Ginger Lawrence | 13 August, 2018, 06:28

The Turkish Lira suffered its worst one-day loss in a decade after President Donald Trump announced the United States would hike metals tariffs, losing about 20% of its value against the USA dollar, prompting investor confidence to slump.

Negotiations failed to achieve the desired results, prompting the Turkish government to try more aggressive tactics, regardless of their costs to the country's economy and global standing.

"Unless the United States starts respecting Turkey's sovereignty and proves that it understands the dangers our nation faces, our partnership could be in jeopardy", he wrote. The decision marked a departure for the US, which has generally tried to calm global markets during times of financial turmoil in emerging markets, especially when investors are gripped by fear of contagion. European banking stocks fell on Friday and the nervousness spread to the United States, where the S&P500 finished lost 0.7%. "This is called carrying out an operation against Turkey", he said.

"We implore President Trump to return to the negotiating table", Trade Minister Ruhsar Pekcan said. It hit a record low after Trump announced he had authorised higher tariffs on imports from Turkey, imposing duties of 20% on aluminium and 50% on steel. "We are knowledgeable with justice and law", Erdogan said in his address in the Black Sea province of Ordu on Saturday. The White House said the newly imposed sanctions would take effect from August 13.

The White House said Mr Trump had authorised them under a section of United States trade law that allows for tariffs on national security grounds.

After losing around 18% against the USA dollar on Friday the lira plunged another 10% as Asian currency markets opened on Monday at 7am AEST.

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Prime minister Narendra Modi and India hoped for peace and development with its neighbour. The India-Pakistan ties nose-dived in recent years with no bilateral talks taking place.

The Turkish strongman also lashed out at interest rates, denounced them as a "tool of exploitation" which should be kept as low as possible.

Turkey wants the U.S. to extradite cleric Fethullah Gulen, a Pennsylvania-based cleric who Turkish authorities say masterminded the coup attempt in which 250 people were killed.

The Euro opened this week's trading session gapping lower against its United States counterpart, responding to the Turkish Lira's sharp downturn last week. Gulen has denied the allegation.

The two North Atlantic Treaty Organization (NATO) allies have been at odds over a wide range of issues: diverging interests in Syria, Ankara's ambition to buy Russian defence systems and more recently the case of Andrew Brunson, an evangelical pastor on trial in Turkey.

A delegation led by Turkish Deputy Foreign Minister Sedat Onal failed to secure a deal last Wednesday in talks in Washington on a number of issues including Brunson.

After Brunson had been in jail for nearly 20 months, a court in July ordered him to be moved to house arrest. "Nobody should try to make us fall into this trap, we won't be fooled by this plot, nobody should get excited".