Turkish Economic Crisis Deepens As Currency Hits All-Time Low

NZD  USD

NZD USD

"As we have seen during the Greek debt crisis, financial markets are sufficiently interwoven that concerns over debt serviceability in one region can spread quite quickly within European banks".

Turkey's currency fell Friday after its economy was rattled by the United States' move to slap the country with more tariffs.

The lira hit a record low of 6.24 per dollar on Friday, before recovering to 5.92 - still down a whopping 7 per cent on the day.

Trump said he had authorized higher tariffs on imports from Turkey, imposing a 20 percent duty on aluminum and 50 percent one on steel.

'If they have their dollar, we have the people, we have Allah, ' he said.

Politically, Turkey's finance minister continues to try to say the right things, including that the country will embrace a tightened fiscal policy in the coming months to achieve the strategic goal of "economic balance".

On Friday, the euro sagged to a 13-month low against the dollar, down 0.7 per cent to $1.1450, after the Financial Times reported that the European Central Bank was anxious about possible losses at eurozone banks operating in Turkey.

Turkey said it would respond to the new US tariff action "without delay" and warned the move would further harm relations between the two countries.

The US dealt Turkey and the lira a further blow in a tweet on Friday, in which Mr Trump said he had approved the doubling of tariffs on Turkish steel and aluminium.

Jackson said the weakness of the lira would boost competitiveness for Turkey's exports, but the tariffs on steel and aluminum would offset that.

Brunson's charges include spying for the PKK, listed as a terrorist group by both the US and Turkey, and the Fetullah Terrorist Organization (FETO), the group behind the defeated coup attempt in Turkey of July 2016. High level meetings in Washington between USA and Turkish officials ended this week without an apparent resolution.

What you need to know about the Perseid meteor shower
Perseid meteors pose no threat to Earth, as many of them burn up in the atmosphere more than 50 miles above the surface. He said the meteor activity has been ongoing for more than two weeks and will continue for about another week.

The president's characteristic defiance in the face of a shaky economy has further unnerved investors. He said this would be Turkey's response "to those who wage economic war against us".

He returned to his familiar refrain of urging Turks to use their reserves of dollars, euros and gold to buy up lire. "This is a national, domestic battle", he said.

"Some countries have engaged in behaviour that protects coup plotters and knows no laws or justice", he said.

He added: "Relations with countries who behave like this have reached a point beyond salvaging".

Turkish authorities arrested Brunson in December 2016, claiming that he was a spy and was linked to a failed plot to overthrow the government. Gulen denies the allegation. In the latter's case, investors fear that Europe's banks could sustain large losses if Turkey is forced to default on its debts.

Mr Trump intensified his spat with Turkey by imposing the higher tariffs, putting unprecedented economic pressure on a North Atlantic Treaty Organisation ally and deepening turmoil in Turkish financial markets. The currency has fallen more than 40 per cent this year, fanning worries about a full-blown economic crisis.

Presenting the government's new economic model, Albayrak said the next steps of rebalancing would entail lowering the current account deficit and improving trust.

"First of all, confidence needs to be regained".

President Trump's discarding of the Iran nuclear deal is a point of contention, as well, as almost half of Turkey's oil imports come from Iran, meaning new sanctions against Iran come back and hurt the Turkish economy as well.

Turkey's sovereign dollar-denominated bonds tumbled, with many issues trading at record lows.

Recommended News

  • IKEA Greets India At Hyderabad Store,

    IKEA Greets India At Hyderabad Store, "Excited To Meet You": 10 Facts

    Those rules have been relaxed, and Ikea is planning stores in Mumbai , Bangalore and a suburb of New Delhi in the coming years. After Hyderabad , the company would be opening stores next in Mumabai, Bengaluru and National Capital Region.
    Health workers in Congo being vaccinated against Ebola

    Health workers in Congo being vaccinated against Ebola

    The total death toll has reached seven from 16 confirmed cases, the ministry said in a bulletin on Monday. It was successful during its first wide-scale usage against the previous outbreak in Equateur Province.
    Pogba assures Man Utd he wants to stay

    Pogba assures Man Utd he wants to stay

    After a £52m deal was struck with Shakhtar Donetsk before the World Cup, the Brazilian midfielder agreed to join Man United. Pogba overruled Alexis Sanchez when United were awarded an early penalty despite the protestations of his teammate.
  • Heavy rains douse Bellerive, suspend Round 2 of PGA Championship

    Heavy rains douse Bellerive, suspend Round 2 of PGA Championship

    Koepka ran off three straight birdies after he made the turn and came to the par-5 ninth at seven-under for the round. Woodland followed up a great start with a round good enough to get him in the record book at the PGA Championship.
    Monsanto is found guilty in Roundup trial

    Monsanto is found guilty in Roundup trial

    Monsanto, which is facing up to 5,000 similar lawsuits across the country, later said it would appeal against the verdict. But the World Health Organization's cancer arm in 2015 classified glyphosate as " probably carcinogenic to humans ".
    Deadbeat Brad? Jolie says Pitt hasn’t paid his share of child support

    Deadbeat Brad? Jolie says Pitt hasn’t paid his share of child support

    Pitt's lawyers answered that Pitt actually suggested expediting the divorce in this way and had already agreed to it. Pitt's response said that a status conference that is already scheduled would serve the same objective .
  • A varied diet makes you fat, say scientists

    A varied diet makes you fat, say scientists

    The new advisory points out that there are many ways to define a varied diet, and some of them aren't so healthy. Doctors with the America Heart Association say there's no proof that a diverse diet is healthy.
    Takeaways From the Pence 'Space Force' Sales Pitch

    Takeaways From the Pence 'Space Force' Sales Pitch

    The secretary will oversee a unified combat command that will coordinate activities and establish combat doctrines for space. Anyway, we'll get more details on what the Space Force actually entails in coming days.
    Geely Reportedly Considering $1.9 Billion Lotus Makeover

    Geely Reportedly Considering $1.9 Billion Lotus Makeover

    In February, Li emerged to be the biggest shareholder in German luxury-car maker Daimler AG with an nearly 10 per cent stake. The company has spent more than $11 (£8.5 / €9.5) billion to revive Volvo and now it looks like it is Lotus' turn.
  • Partial Solar Eclipse Occurs Saturday! What to Expect

    Partial Solar Eclipse Occurs Saturday! What to Expect

    The wide path of this eclipse means more people will be able to catch it, compared to the July 13 partial solar eclipse . Nasa advises to use eye protection like special eclipse glasses should be used to witness the solar eclipse.
    Roger Stone associate held in contempt in Russia probe

    Roger Stone associate held in contempt in Russia probe

    District Chief Judge Beryl Howell ruled Miller in contempt of court after he repeatedly defied subpoenas to testify under oath. Mueller has been focusing in recent months on Stone, who has had a decades-long relationship with Trump.

    Manchester United fans pleased with Paul Pogba's performance vs Leicester City

    They were trying to get it done before the World Cup but before a ball was kicked they had it done. I think football is changing and managers should be called head coaches".

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.