Erdogan says crash of lira 'political plot' against Turkey

Marsha Scott
August 13, 2018

Turkey says doubled tariffs on Turkish steel and aluminium announced by US President Donald Trump are against the rules of the World Trade Organisation (WTO).

Putting a 50 percent tariff on a foreign country's steel exports isn't the most conventional way to secure an imprisoned American's relief.

In a statement the White House clarified that Trump had authorized the preparation of documents to raise steel and aluminum tariffs.

Iran's Foreign Minister Mohammad Javad Zarif waded into the mounting row between Turkey and the United States, accusing Washington of an "addiction to sanctions and bullying".

In a separate opinion piece in the pro-government newspaper Daily Sabah, Erdogan's spokesman Ibrahim Kalin said Turkey's efforts to solve the crisis with diplomatic methods had been dismissed by the Trump administration, warning that "the USA runs the risk of losing Turkey" as an ally.

Trump said the tariffs on aluminum imports would be increased to 20 percent and those on steel to 50 percent as the Turkish lira "slides rapidly downward against our very strong Dollar!" The currency is down about 40 percent so far this year.

President Tayyip Erdogan blamed the United States for the plunge in a speech last night, but why is the lira falling? The weakened currency's value has helped increase inflation and anxious global investors.

Turkish President Recep Tayyip Erdogan on Thursday also dismissed concerns over the tumbling lira and called on his nation to "have no worries".

Iran has also suffered a major tumbling of its currency this year partly over the reimposition of United States sanctions after Trump abandoned the 2015 nuclear deal. But some investors fear the Turkish economy is growing too quickly and could face problems.

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Meanwhile, markets are deeply concerned over the direction of economic policy under President Recep Tayyip Erdogan, with inflation at almost 16%, but the central bank reluctant to raise rates in response.

"Interest rates should be kept to a minimum", he added.

Turkey's spat with the United States has further weighed on the lira.

Regarding the situation of the Turkish currency, Erdogan once again called on his fellow citizens to back the lira, which depreciated 18 percent on Friday, by selling their dollars and euros.

People change money at a currency exchange office in Istanbul, Turkey, Aug. 10, 2018.

"What happened? Immediately, we have imposed the same sanctions on their ministers", Mr. Erdogan said. But invoking national security is the only way to square Trump's policy with US law and WTO rules.

Brunson denies both charges and his supporters argue that these accusations were fabricated by the Turkish government.

The White House followed through on that threat on August 1 and sanctioned two top Turkish officials linked to Brunson's ordeal. The move came as Washington was in a diplomatic standoff with Ankara over Turkey's detention of an evangelical pastor from North Carolina. According to a source in Erdogan's office, the two said they were pleased with the positive direction in their economic and trade ties and with the ongoing cooperation in the energy and defense sectors.

Other reports by MaliBehiribAe

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