Turkey to reduce currency risk for companies, Finance Minister Albayrak says

President Erdogan centre said that he would seek new trading partners

A Turkish business now effectively owes twice as much as it did at the beginning of the year.

"We (also) have our Venus and Vestel", Erdogan said about homegrown Turkish electronics brands.

More broadly, the turmoil has an effect on other emerging markets.

"Spanish banks' exposure to Turkey is equivalent to around 6 percent of Spanish GDP, much of which is due to BBVA's stake in Turkey's second largest private bank".

The Turkish president's standoff with Trump has fuelled concerns of a foreign policy shift that would result in Turkey leaving North Atlantic Treaty Organisation, forging stronger political links with Russia, China and Iran, and allowing the three million Syrian refugees living in Turkey to leave for the EU.

That being said, this financial year, the rupee has depreciated by 8.7% overall. There is no economic reason ... "This is called carrying out an operation against Turkey", he told reporters on Sunday, Aug. 12.

"I am specifically addressing our manufacturers: Do not rush to the banks to buy dollars", he said. "You should know that to keep this nation standing is. also the manufacturers' duty", he said.

Why is the lira falling?

Investors are anxious about a confluence of factors including Turkey's reliance on foreign loans, which become more hard to repay when the country's currency is plunging. Meanwhile, inflation has hit 15%.

The euro also stumbled to more than one-year lows, as did the Australian dollar. "Our relations with Turkey are not good at this time!" he says on Twitter.

Donald Trump's administration hit Turkey's justice and interior ministers with sanctions last week.


Meanwhile, the lawyer representing Andrew Brunson, the American pastor at the center of the dispute, renewed an appeal for his release from house arrest and for a travel ban imposed on him to be lifted.

Relations between the two North Atlantic Treaty Organisation allies have spiraled into a full-blown crisis over the trial of Christian pastor Andrew Brunson, who was held for 21 months in a Turkish prison until his transfer to house arrest last month - a move Washington dismissed as insufficient.

The root causes of the current crisis are economic and predate the political conflict between the USA and Turkish governments.

He said: 'You act on one side as a strategic partner, but on the other you fire bullets into the foot of your strategic partner.

Some would like to see Turkey's central bank increase interest rates.

Mr Erdogan has also been getting closer to Russian Federation.

"Significantly more than just official promises of action are needed to exit the current crisis", said Andy Birch, principal economist at IHS Markit, calling for "a sharp central bank rate rise". Mr Erdogan favours lowering borrowing costs to fuel credit growth and economic expansion.

That helped ease tensions in financial markets, with the Turkish lira stabilizing somewhat near record lows.

Over a third of Turkish banks' lending is in foreign currencies, according to Reuters. This is the highest it has been since Jul 14 a year ago. And there are already signs that it's dragging down markets in Asia.

Over the weekend, Arab and foreign tourists flush with liras queued outside luxury shops in the city including Louis Vuitton, calculating that they could buy those high end products for cheaper than they would amid the currency crash.

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