Published: Mon, August 13, 2018
World Media | By Cesar Oliver

Turkey lira crashes as Trump piles on pressure

Turkey lira crashes as Trump piles on pressure

The U.S. exported $9.75 billion worth of goods-mostly cotton, scrap iron, steel, civilian aircraft parts, coal, and petroleum gases-to Turkey, and imported $9.42 billion worth of goods from them.

Some economists have suggested that capital controls may be imposed; these are limits on the money that can move in and out of a country.

Markets are deeply concerned over the direction of domestic economic policy under Erdogan with inflation at almost 16 percent but the central bank reluctant to raise rates in response.

"The lira has been weakening since and it's coming to a head today", Wilson said, adding the downward spiral will continue if Turkey insists on a soft landing.

Wider concerns about President Erdogan's expanding powers, especially over monetary policy, have taken chunks out of the value of lira this year.

In what appeared to be a diplomatic slight, Turkey announced soon after Trump's tweet that Erdogan had held a phone call with Russian President Vladimir Putin about "strengthening economic and trade ties".

Washington is in a standoff with Ankara over the imprisonment and house arrest of American pastor Andrew Brunson.

In a tit-for-tat response to the United States sanctions, Erdogan responded by announcing that the assets in Turkey of the United States secretaries of "justice and interior" would be frozen.

On Friday, Erdogan asked Turkish citizens to sell off their gold and dollars and exchange them for the lira, in an attempt to prop up the currency.

The Lira has plunged 66% since the start of the year, pushing up the cost of goods for Turkish people and shaking worldwide investors' confidence in the country.

Watch the lira trade in real time here.

Despite Trump's insistence, Turkey has not budged in freeing American pastor Andrew Brunson, who has been detained by Turkey for nearly two years on charges that he was working with a terrorist organization and was a spy.

Relations are also tense because of new U.S.

"Yet the United States has repeatedly and consistently failed to understand and respect the Turkish people's concerns", he wrote in the article, warning that Turkey had alternative allies.

"It is astonishing that no matter how punished the Lira looks, traders are showing absolutely no indication that they are finished with pricing in "bad news" into the market", Jameel Ahmad, the head of currency strategy and market research at FXTM, said.

Washington "must give up the misguided notion that our relationship can be asymmetrical", he said in the opinion piece.

But invoking national security is the only way to square Trump's policy with USA law and WTO rules.

But Israel released that woman last month, and pastor Andrew Brunson of North Carolina remains in a Turkish prison.

Erdogan said high foreign exchange rates were the means used in plots against Turkey.

Sanctions and pressure would only serve to harm ties between the two North Atlantic Treaty Organisation allies, Hami Aksoy also said in a statement.

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