Turkish lira down 22% as crisis builds

Posted August 14, 2018

The review is in response to Turkey's imposition of additional tariffs on US$1.78bn worth of USA imports, which came in retaliation for the United States' additional tariffs on imports of steel and aluminium products.

The tariff move effectively priced Turkish steel out of the USA market, which accounts for 13 percent of Turkey's steel exports.

As the tariffs will take effect immediately, a lot of Turkish steel exporters and USA importers could be hurt, as there are steel cargoes on the way to the United States and some cargoes waiting to be shipped, an S&P Global Platts report said citing Turkish industry sources.

"We will continue to support our iron, steel and aluminum exporters by defending their interests against illegal practices of other countries on every global platform, especially WTO", it said.

The moves stem from Trump's frustration over a detained American pastor held by Turkey on what United States officials say are bogus charges, two sources with knowledge of the President's mind-set tell CNN.

It follows moves by President Donald Trump on Friday who said on Twitter he authorized those tariffs to be doubled, noting that "aluminum will now be 20% and steel 50%".

The United States has denied Turkey's request for deporting Fethullah Gulen, a US -based Turkish cleric who Ankara says is the main perpetrator of the 2016 coup.

Turkey is the world's eighth largest steel producer and according to a June report by the U.S. Commerce Department, the seventh largest source of U.S. steel imports. She called on Trump to return to the negotiating table, saying "this can and should be resolved through dialogue and cooperation".

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Turkey wanted issues to be solved through diplomacy, dialogue and good intentions, Aksoy said.

Russian President Vladimir Putin discussed economic and trade ties by phone with his Turkish counterpart Tayyip Erdogan on Friday, the Kremlin said in a statement.

The lira fell further as Erdogan spoke. Early on Friday, the currency hit an all-time low of 6.30 against the U.S. dollar, Xinhua reported.

"It is making an operation against Turkey..."

On Friday, Treasury and Finance Minister Berat Albayrak rolled out the government's new economic plan, promising central bank independence and tighter budget discipline, but giving few details to reassure investors and stem a widening currency crisis.

"Don't forget, if they have the dollar, we have our people, our Allah", Erdogan told a crowd of supporters in Guneysu, a town in the northern province of Rize, where his parents are from.

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

"One of our principles will be ensuring the full independence of monetary policy", Abayrak said as he outlined his ministry's "new economic model".