Turkish lira hits record low amid financial panic, rising U.S. tensions

Brussels

Brussels

"Our relations with Turkey are not good at this time!", he said.

In a tweet, Trump cited the decline in Turkish currency as justification for increasing tariffs to 50 percent on Turkish steel and 20 percent on Turkish aluminum.

U.S. President Donald Trump said he's authorized doubling some metals tariffs on Turkey, citing poor relations with the North Atlantic Treaty Organisation ally amid an escalating conflict over its detention of an American pastor.

He urged Turkish citizens to immediately exchange their gold and dollars for lira.

"US and Turkey are breaking up", Mr Cook told The National, recommending that Washington instead focuses on "how the tanking of the Lira affects other emerging market currencies, and moving to contain the contagion".

It all started with Turkey's own mistakes - or, more accurately, with Turkish President Recep Tayyip Erdogan's.

Amid a steep drop in Turkey's currency, the Lira, the president announced on Twitter Friday that he has given the greenlight to sharply increased tariffs.

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The currency has lost almost a third of its value this week. This will be my people's response to those who have waged an economic war against us'. "Turkey's awkward diplomatic relations with the west, and the USA in particular, also need to be addressed and remain a deep concern for foreign investors".

The Turkish lira fell to record lows as concerns over a widening rift with the United States persisted after a Turkish delegation returned from talks in Washington with no apparent solutions.

Turkish President Tayyip Erdogan leaves from a mosque in Bayburt, Friday. The lira fell further after Trump's tweet.

"Most of the actors in the Washington scene think that carrots just don't work with Turkey, just the stick", said political analyst Atilla Yesilada of Global Source Partners. The lira is now down 36% this year and bond yields have sky-rocketed. Gultekin hopes that some sort of compromise between Turkey and the U.S. can be reached, enabling Erdogan to have an "honourable exit" and come up with a substitute for the International Monetary Fund stabilisation programmes of previous crises.

"As he stated, the president has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey", White House Deputy Press Secretary Lindsay Walters said.

Turkey later warned the United States that sanctions and pressure would only serve to harm ties between the two North Atlantic Treaty Organisation allies, adding Ankara would continue to retaliate as necessary against USA tariffs.

The latest escalation came as Turkey's Economy Minister Berat Albayrak, who is Erdogan's son-in-law and a trusted lieutenant, unveiled what was touted as a new economic plan, pledging Central Bank independence, tighter budget discipline and sustainable and healthy growth. There wasn't much Eurozone data released over the past week but the few reports we had were far from impressive as factory orders and industrial production in Germany tumbled. High level meetings in Washington between US and Turkish officials ended this week without an apparent resolution. The predictable result is this has made inflation get out of control - it is up to 15.9 percent when they are supposedly trying to keep it to 5 percent - because the central bank has been so slow to raise rates, and, in fact, refused to do so at its most recent meeting.

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