Saturday, 15 December 2018
Latest news
Main » Turkish Economic Crisis Deepens As Currency Hits All-Time Low

Turkish Economic Crisis Deepens As Currency Hits All-Time Low

11 August 2018

US President Donald Trump dramatically increased the pressure on Turkey on Friday, threatening to double tariffs on the country's aluminium and steel exports, leading to a fresh slump in the already tumbling lira.

President Donald Trump said in a tweet Friday that he would hit Turkey with additional tariffs, as their national currency continues to drop.

Turkey's economy is regarded as fragile because of its high debt, which the worldwide Monetary Fund estimates is 50 percent of its gross domestic product.

Friday morning, President Trump tweeted about the situation with Turkey, announcing further tariffs and noting that relations between the US and Turkey are "not good".

The lira has always been falling on worries about Mr Erdogan's influence over monetary policy and worsening relations with the United States.

The White House cited national security grounds as the means by which Mr Trump had authorised a 50% steel tariff and 20% aluminium tariff on Turkey.

President Tayyip Erdogan told Turks to exchange gold and dollars into lira as the currency tumbled after President Donald Trump doubled US tariffs on metals imports from Turkey.

Israeli Jets Pound Gaza Strip as Rockets Fired Into Southern Israel
The Israel Defense Forces said mounting violence began Wednesday after militants shot at an IDF vehicle in the Gaza Strip. However, several houses and factories were damaged in Israeli communities by the impact of the rockets.

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

Indeed, much of the recent concern has been fuelled by President Recep Tayyip Erdogan's economic policy.

The Turkish President, Recep Tayyip Erdogan, took a combative stance in an earlier press conference, pledging to "overcome this economic war".

"If there is anyone who has dollars or gold under their pillows, they should go exchange it for liras at our banks". The NATO allies are at odds over the detention in Turkey of USA evangelical pastor Andrew Brunson on terrorism charges.

The Trump administration has called upon Erdoğan to release Brunson for months.

Turkey's woes also shook world markets, pushing down stock indexes.

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.

Rains, landslides kill 24, displace thousands in India's Kerala state
A red alert has been sounded ahead of the impending release of water from the Idukki Reservoir, the largest arch dam in Asia. At 12.30 p.m. on Thursday, the water level crossed 2,399 metres, and one of the shutters was opened after a gap of 26 years.

The CDS surge shows investors are betting Turkey will now have more trouble paying its debt and is a good barometer for investor fears who now rank Turkey more risky than Greece.

The lira, which had traded at 4 to the dollar as late as April, was being quoted at more than 7 to the dollar at one point Friday before rebounding to about 6.4.

However, these new sanctions may have a reverse effect, and could end up being more beneficial to Russian Federation.

Yet even US firms that have disclosed relatively little exposure to Turkey fell as that country's crisis escalated Friday, with Citigroup Inc. down the most since May.

Relations between Washington and Turkish President Recep Tayyip Erdogan also have worsened because of the detention of three locally employed United States consular workers, trade matters and differences over Syria.

The lira, which has lost more than 40 percent this year, hit a new record low after Trump took steps to punish Ankara in a wide-ranging dispute. 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.

Investors quickly made up their minds, with the Lira sliding 5pc during his 15-minute speech, and then slumping even further in the afternoon, again signalling the deep concern about the stewardship of the economy under Mr Erdogan and Mr Albayrak, his son-in-law and newly appointed Finance Minister.

Redskins Rookie Derrius Guice Out For Season With Torn ACL
Previous year at LSU, Guice was hampered by a hyperextended knee, limiting his snaps and forcing him to miss a game. Bill Belichick was asked Friday if he had any update on a report Brady was dealing with a back issue. "No".

In June, the U.S. Senate passed a bill prohibiting Turkey from buying F-35 fighter jets because of Brunson's imprisonment and Turkey's purchase of Russia's S-400 air defense system.

Turkish Economic Crisis Deepens As Currency Hits All-Time Low