TSX, global markets down amid Turkey economic crisis

Air Force Boeing KC-135R Stratotanker as it touches down on the flight line at the Incirlik Air Base in Turkey

The currency's slide deepened early Friday, after the Financial Times reported that the eurozone's chief financial watchdog was concerned about how some of Europe's biggest lenders would be affected by a crisis in Turkey. I hope we can soon get Pastor Brunson and other Americans released in a win-win fashion for both the USA and Turkey."Trump's move to double tariffs on Turkey was even praised by one of the president's most frequent Democratic critics".

Pressure on Turkey is also coming from US Congress that moved late last month to block further F-35 deliveries to Turkey until it cancels the S-400 defence system deal with Russian Federation and Brunson is released.

The tariff for steel imported from Turkey will now be 50 percent.

The embattled Turkish lira tumbled over 16 percent to new record lows against the dollar on Friday as strains with the United States intensified, but President Recep Tayyip Erdogan defiantly proclaimed Turkey would emerge victorious in an "economic war".

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

Prior to Trump's announcement, the Turkish lira fell to its lowest point ever against the US dollar on Friday.

"This is a national, domestic battle". On Friday, he said the country had to take steps in answer "to those who have waged an economic war against us".

The increase in tariffs is considered a blow to the value of Turkey's lira, which reportedly fell further after the president's announcement.

Erdogan spoke briefly Thursday night and alluded to problems with the currency, saying "various campaigns" were underway, adding: "If they have dollars, we have our people, our righteousness and our God".


As the crisis swelled he told his supporters not to worry.

On Monday, the Turkish lira suffered its most significant drop in a decade following reports the Trump administration was considering ending Turkey's duty-free access to the USA market.

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.

A statement from the Kremlin said the two leaders discussed economic and trade ties.

Reuters Turkey's president, Recep Tayyip Erdogan, listens during a news conference with British Prime Minister Theresa May in London, U.K., May 15, 2018.

Independent analysts argue the central bank should instead raise rates to tame inflation and support the currency.

Shares of Turkish steelmakers Kardemir Karabuk Demir Celik Sanayi ve Ticaret AS and Eregli Demir ve Celik Fabrikalari TAS plunged as much as 8 per cent and 9.9 per cent, respectively, after Trump's tweet.

"President Erdogan's strengthened powers under the new presidential system have made it increasingly uncertain whether policymakers will be able to act to stabilise the economy", said William Jackson, chief emerging markets economist at Capital Economics in London. "Turkey is an important strategic partner militarily and economically".

An artificially low interest rate environment has contributed to additional ongoing pressures on the Turkish lira. "On some days, I end the day with a loss".

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