Trump doubles metal tariffs on Turkey as lira falls by 20%

Erdogan says attempts to exert economic pressure on Turkey futile

Turkey's lira hit a new record low against the USA dollar in early trade on Friday, as concerns over a widening rift with the United States persisted after a Turkish delegation returned from talks in Washington with no apparent solutions to the crisis.

Aluminium will now be 20 per cent and Steel 50 per cent.

Turkey remains at loggerheads with the United States in one of the worst spats between the two North Atlantic Treaty Organisation allies in years over the detention for the last two years of American pastor Andrew Brunson and a host of other issues.

Doubling the tariffs to 20 percent for aluminum and 50 percent for steel would magnify the impact of the trade restrictions.

The lira dropped 11 percent against the USA dollar Friday as Turkish President Recep Erdogan warned of a global economic war against his country.

The lira was buffeted by a diplomatic row between Ankara and Washington, with Turkish President Tayyip Erdogan's attempts to talk up the currency having exactly the opposite effect.

The lira plunged to as low as 6 against the United States dollar on Friday, a day after a Turkish delegation returned from talks in Washington with no apparent solutions to their simmering crisis.

"In this process, we will finely work every single detail as a wide spectrum including all national and global stakeholders", he said in the first part of his speech, referring to Turkey's Medium-Term Economic Plan (OVP), which will soon be renamed.

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


Investors are concerned with Erdogan's firm grip on Turkish monetary policy.

The Lira touched a historic low versus the U.S dollar. He is a self described "enemy of interest rates" and wants banks to lend cheap credit to fuel growth, something experts are anxious could seriously affect the economy. But since adopting increased powers, Erdogan appears to have greater control over the bank as well.

The dollar rose as exposure to Turkey could impact European banks and spark a domino effect throughout Europe as people begin to pull out of those banks and into the US, said Gregan Anderson, macroeconomic strategist at brokerage Bulltick LLC.

He added that skilled human resources and a strong society will support the three main phases of Turkey's new economic perspective.

Treasury and Finance Minister Berat Albayrak - who is Erdogan's son-in-law - was scheduled later on Friday to outline a "new economic model".

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

Foreign investors could be spooked and try to pull their money out, reinforcing the currency drop and potentially leading to financial instability.

An immediate "aggressive interest rate hike" was also needed, Mr Grier said, with something of the order of 1,000 basis points as seen in Argentina this year. "On some days, I end the day with a loss".

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